Because of the nature of family businesses, owners often make a series of mistakes that hinder the effective succession of the business. It’s easy to understand the reasons behind the mistakes, but it’s critical to avoid them.

The common mistakes include failure to:

/ Work on a succession plan

/ Identify a successor

/ Adequately train the successor

/ Actively resolve competition for the successor role

/ Employ leadership delegation and oversight

/ Distinguish between proper compensation and earnings distribution policies

/ Enable owners to dispose of their ownership stake in an orderly manner

/ Plan for transfer of the ownership of the business

/ Make lifetime transfers of ownership interests to save taxes and protect assets

/ Communicate plans in a timely manner to key stakeholders

As business owners we should use the checklist above as a guide to what not to do and what we need to ensure we have handled in our own business to ensure a successful business succession plan and ownership transition.

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.