Blog

With the start of a new financial year, it’s timely to consider planning for the now and future for the success of your Business.  

The key to success is sound business practices, including formal decision-making processes and disciplined family management.  These need to stay relevant and relatable to both family and Business interests, to protect, preserve and provide financial stability.  

People, circumstances, economic conditions and the Business landscape continually change, and we are operating in uncertain times. This is where taking active steps to shape your Business pathway and direction is critical. 

A common failure of Family Business is decision-making inaction.  Delaying, putting off crucial decisions that, in the longer term, have consequences, often costly.  Outcomes happen by default rather than by design. 

Is that your Business? Yes, read on; there are ways to take your Business forward. 

Begin by adopting a planning framework and a step-by-step process to guide decision-making in key areas such as Business structure, succession and ownership.  This early planning is a more proactive, deliberate approach, rather than reacting to problems. 

4 Planning framework steps 

1. Keep, preserve what matters most. What defines you beyond the bottom line.   E.g., healthy family relationships, stability, the long-term viability of the business, clear structures and control over when and how succession occurs. Importantly, build strong foundations to support family values, aspirations, and wealth. 

2. Strong Governance underpins stability and viability. It's critical to have formal documents such as a Charter or Family Constitution in place that define explicit roles, authority, and responsibilities.  This clarity helps avoid blurring the lines between family and business matters. Importantly, separate business and family meetings. For Business forums, if needed, engage an independent advisor or director to provide impartial advice and objectivity to discussions and outcomes.  

3. Protection for when things don’t go to plan. Is there adequate and effective protection against unintended events or outcomes? Such as having formal decision-making processes to avoid hasty decisions made under pressure. Examples include responses to unexpected tax and GST exposure and establishing clear roles and meeting members' expectations fairly and equitably. 

4. Prosperity and success underpinned by intention, deliberate, careful planning and choice. Don’t leave it to chance or hope! Examples: understanding tax implications of different pathways, having structures that support the business's next stages, and having options around exit and succession.  

5. Annual Review. Conduct these reviews as an opportunity to step back and assess if current arrangements, structures, tax matters and succession plans are still best serving members and business interests, now and into the future. Are they aligned? This review process also allows for reflection, clarity of goals, mapping priorities, and identifying any potential or emerging risks.   

Adopt sound planning steps for the success of your Family Business for the now and the future.