Succession-Facts

Home

Succession

_{The Facts}

A Question to Owners of family or private businesses:

Do you have a Succession Plan in place?

Those who answered 'NO' are in the majority and should be congratulated for wanting to address this important matter because statistics from the 2006 RMIT University "Family and Private Business Survey*" show:

	14% of Owners are over 65 with 60% over 50
	83% do not have a Management Succession Plan
	75% do not have a Future Ownership Plan
	53% will sell – 19% NOW
	66% require Sale of their Business to retire
	54% of CEOs will retire next 5 years – 84% 10 years
	65% have not identified next CEO
	57% say the Next Generation are not interested in the Family Business
	54% of Owners rely on the Business to fund their Retirement
	53% do not have a Business or Strategic Plan
	52% do not have a written Management Structure or Job Descriptions for Key People
	79% do not appraise Family Members performance
	52% do not carry out Performance Appraisals
	83% do not have Training and Education Programs for the Next Generation
	69% do not have similar Programs for Key People
	44% do not have Key Person Insurance for the Owner
	88% do not have Cross Insurance for Business Partners
	60% do not have Insurance for Key Family Members
	89% do not have Insurance for Key Non Family Members
	30% will survive Generation change

*The findings are reproduced with the permission of Professor Kos Smyrnios, author of the survey with his research team.

The stakes are high! Currently Family Business wealth is estimated at $4.3 Trillion, (more than 3.6 times the Market Capitalisation of Companies on the ASX at 30 July 06) and transition of wealth in the next 10 years is estimated to be $3.5 Trillion

The odds for a successful transition are stacked against the owner and the business UNLESS you take an active role in the transition process. 24% of private businesses will change generation in the next 5 years, 32% in the next 6 to 10 years.

Successful planning and implementation requires time and commitment. Understanding the human, as well as business issues, is an essential component of Succession Plans for all family and private businesses.

How often have we seen a Family Business described as "a witches brew" a combination of money, love, power,greed, jealousy, played out in the courts (and the newspapers), leaving lawyers as the real beneficiaries? What a dreadful reward for the dedication, time and commitment of the founders and current owners! How can you avoid this?

Find out, using our Free Written Opinion