Business Succession – when ‘off the rack’ doesn’t fit so well
Significant Wealth Owner Solutions

Paul Ashworth, Managing Partner

In over 40 years of advising business owners on succession options for their business, we understand that ‘one size doesn’t fit all’ – that is the nature of family controlled businesses*
Posted 21 November 2023

The circumstances which cause business succession to be addressed and planned for are varied and often random. Factors together or singularly that may be causing you to evaluate your business succession may be that a suitor has approached you, family dynamics now support or rule out a transition to the next generation, personal circumstances or preferences have altered, or the financial, competitive & economic landscape and outlook require a course of action be taken. It is not one size fits all. Opportunities and the environment are often random. 

The end solutions, their elements and operation are well known. They cover partial or complete exit (trade and public markets and management), family generational succession, and varying private equity involvement (passive or active), to continued growth and expansion through further external management of the business. We have found that the key to the most optimal outcome is where business owners combine two processes in their planning:

  1. Business Owner Strategy Plan – this is the owner's strategic plan (not the business’ plan), which you may or may not share with those in the business. Amongst other things, it should address and canvass both critical business continuity** implications where key owner stakeholders are involved, and succession strategy and vision. To undertake this planning process every 3 years and have a means for it to be reviewed and considered with advisers every 6 months, will place you in an optimum position to execute whatever succession strategy you ultimately select. Above all, it ensures that you and your plans are ‘ahead of the curve’ and able to respond and act when circumstances provide the opportunity or the circumstances dictate.  

  2. Business Plan – to improve profitability and growth in accordance with clearly defined and measurable goals (which satisfy the business owner's mission). This is done by dispassionately considering how the business is operating internally and externally, so as to prioritise actions and resources for the next 12 months, matched to clearly measurable objectives and key performance indicators (KPI’s). It ought be re-iterative, and for best results, recast every 12 months with a fresh, blame-free examination of the business and external environment. Importantly in terms of business succession, a critical factor is ensuring that the business is being conducted with excellent financial ‘hygiene’, systems, controls, structure and people management & development. Too often, the need for more immediate business succession occurs, and the business is not in the optimum condition that it should be. 

It is all too easy to ‘fall below the curve’ in terms of your own business owner strategy and the business’ ongoing plan. A consistent effort applied regularly by the key owner stakeholders to their Business Owner Strategy will ensure they are able to dynamically manage business succession strategy.  

Cameron Harrison and its Partners have been uniquely focussed on assisting business owners for over 40 years. This sees us have a deep understanding of their complete wealth needs, across both active risk (business) and passive risk (lifestyle, investment & philanthropy). The outcome is proper and effective integration of strategy, structure and conduct. Our Partners have a diverse set of knowledge and experience, covering taxation, corporate strategy, investment management, business and project management, and wealth management.     

*Family controlled businesses are either privately held or publicly listed businesses where one or more families are dominant shareholders in the strategy and conduct of the business.

**Business continuity plans address business interruption. One business interruption can be where there are unplanned absences of key stakeholders and managers of the business. A Business Continuity Plan is a vital component of effective risk management.

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