For a family business looking to become a multi-generational affair, succession planning is a must. Elise Balsillie, Head of Thryv Australia, explains how a carefully drawn-up succession plan document can become the bedrock of a successful and long-standing family business.

I recently found myself engrossed in the latest report from KPMG on the regenerative power of family businesses. The report highlighted that trans-generational entrepreneurship, building and maintaining family socio-emotional wealth, and adopting a holistic approach to strategy and performance help to drive family business performance in Australia.

A key point of interest was how succession planning should be a key business priority for multi-generational success. Specifically, it notes that businesses were more likely to be retained within the family unit if there was a high level of socio-emotional wealth – which is defined as an “equal focus and investment (time, energy, commitment) to both the business and the family” in the report.

What is succession planning?

Many of our customers’ businesses were born from a passion for their craft. They often realise a desire for their legacy to withstand the test of time, and seek to pass on their business to future generations. Succession planning enables small business owners to do just that.

Its purpose is to ensure there are processes in place for all potential scenarios that may jeopardise the survival of a business in years to come.

In short, succession planning is the transfer of knowledge to a formal document that helps:

• New owners to operate the business with the same level of proficiency (ownership succession)
• Senior-level staff fulfilling key operational roles to be replaced seamlessly (leadership succession)
• Organisational values to be transferred and customer interactions remain the same (cultural succession)
• Basic operations to be maintained in the event of an emergency (emergency succession)

How to set up a successful succession plan

There are several important elements to consider when creating your own succession plans with the goal of multi-generational success.

My first tip is to give thought to who is best placed to take over. I’d recommend considering the transferability of their skills and experience, as well as whether they’re genuinely invested in the business’ long-term success.

Second (but no less important) is ensuring that all the not-so-obvious details pertaining to your day-to-day role are documented. This can be achieved with digitisation. Specifically, the help of a CRM (customer relationship management) system. Your intel will be housed in a secure, central platform and accessible by all who need it. This will allow you to step away from the business with minimal disruption to the business’ operations (and your new life!)

The added benefit of this is that your notes can be updated with ease, as regularly as required.

Which brings me to my final tip – be open to doing this as your business develops and changes over time. It’s worth a little bit of effort to ensure that your legacy lives on through your business.

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