The importance of succession planning for business owners.
For many Australian family business owners, the business is more than an asset.
It is often the result of decades of sacrifice, risk-taking, long hours and personal identity. It may fund the family's lifestyle, employ multiple generations, own property, support retirement plans and represent the bulk of the family's wealth.
That is why succession planning is one of the most important areas of financial planning for business owners.
Key actions for business owners
Business owners should consider the following steps:
- Start succession conversations early.
- Identify whether the preferred outcome is family succession, external sale or professional management.
- Separate ownership succession from management succession.
- Assess whether the next generation is capable, willing and prepared.
- Model the founder's retirement income needs.
- Review the business structure.
- Clean up financial records and related-party arrangements.
- Identify key person dependencies.
- Review business property ownership.
- Consider tax concessions and timing.
- Update wills, powers of attorney and business agreements.
- Review insurance and liquidity.
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