Unlocking Success: Strategies for Family Business Sustainability

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Explore a comprehensive guide on managing family business assets, succession planning, and creating a lasting legacy. Learn how to navigate challenges, identify key issues, and develop a 12-month roadmap for sustainable growth. Discover strategies for integrating family values, managing capital, and ensuring a smooth transition for future generations.

  • Succession Planning
  • Family Business
  • Legacy Building
  • Sustainability
  • Wealth Management

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  1. How to use the collateral What s on your mind conversation Use of diagram Top of Mind Here is the start point Use of 4 L s & One Page Plan What does a 12 month agenda looks like For: Passive Assets Passive + Business assets -10-20-or 100 year plan Live, Love, Learn, Legacy It s a question to ask the client What s your vision for the business? Use the Chaos to Greatness diagram 12 Month Review document Here are the issues in succession Use of Spirals and Issues List Start Point Book in now for 10-3-NOW planning session

  2. Whats on your mind conversation Use of diagram Top of Mind

  3. FAMILY SUCCESSION 100 YEAR PLAN INTEGRATION ISSUES CHILDREN S PLANS & DREAMS NO FAMILY RULE BOOK LEGACY, PHILANTHROPY ESTATE ISSUES Top of Mind FAMILY VALUES PASSED ON Where to start? CAPITAL MANAGEMENT Do children have the skills to navigate? INVESTMENT SKILLS OUR How do I treat everyone fairly? RETIREMENT PLANS I worked hard to build this and don t want it wasted! ROLES & TRAINING AND EDUCATION FOR FUTURE TRUSTEE ROLES RESPONSIBILITIES I don t want children to be Country Club kids! The Capital is to live on, not off! EQUALITY - FAIR TREATMENT IS NOT EQUAL? What will my legacy be? How do I give this the best chance of success? Who do I need to surround myself with? What is my role now? FAMILY GROUP WEALTH CREATORS WEALTH RECIPIENTS FUTURE BENEFICIARIES

  4. Live, Love, Learn, Legacy It s a question to ask the client -10-20-or 100 year plan

  5. LIFE PLAN What makes a Great Life Live Learn Love Legacy

  6. Whats your vision for the business? Use the Chaos to Greatness diagram

  7. Chaos to Greatness CHAOS MEDIOCRITY EMERGING BUSINESS GREAT BUSINESS LASTING GREATNESS Systems Clear And Followed Take Any Client No Systems/Processes Some Systems Owner On The Tools Systems In Place Functional Roles Good Systems Followed Strong Culture Functionality Clear Positioning Known Profit Negligible No Value Proposition Run Around Like A Headless Chook Owner Doing Everything Family Member Doing Books Cash Flow Inconsistent Beige Some Black Activity Branding Inspiring Vision Higher Purpose Branding Recognisable Clear CVP Owner Freed Up Unclear Pricing Unclear Positioning Possible Low-Level Staff Positioning Referrals Clear CVP Mentoring/Coaching Development Plans For Staff Management Systems Strong Distribution Good Profit Good Cash Flow Unclear Job Roles Duplication Outsource/Insource Red Cash Flow Steady Owner Doing Lots Of Red Pricing & Packaging High-Level Staff High Performing Team Talent Magnet Things Get Missed Profit Low Less Owner Dependent Owner Free To Go Part- time Owner Has Coach/Mentor Tax Issues No Business Plan Employer Of Choice Financial Systems & Reporting Professional Leader Saleable Other Business Opportunities Owner In Red/Blue Key Person Dependent No Marketing Plan Putting Out Fires First Brick Wall Business Debt Mature Business Reactive Decisions Made On Price Second Brick Wall Values Identified Team Ethos Advisory Board Succession Debt Free Values Lived Full Board Governance Contribute To Society Office Looks Cheap OWNER S FEELINGS Stressed Pressured Scared Pressure Trapped Apathy? Safe Relieved/Relaxed Energised Relaxed Confident Pay Back Proud Satisfied Fulfilled

  8. Here are the issues in succession Use of Spirals and Issues List

  9. Succession Planning Multiple issues Skills & capabilities required to implement 1 Documentation to support Why do you need a Family Board Adviser? Communication issues To who & how? Control issues When to relinquish Timing issues When to start? Why me? Structural issues Are our structures future proof? Timing issues When to start? Financial issues How to untangle? Family issues People issues Planning issues Where to start Family Issues

  10. Capability & Planning Issues How do we engage & communicate? What does success look like? What if the kids don t like it? How do we manage conflict? Are we accountable? Who will help us? Where to start? Where are we going? Ability will articulate our future direction? Are we committed? Our existing advisers competencies? Who will champion the cause? What capabilities do we need? What are our decision trees? How do we make tough decisions? Best of Breed team required across tax, legal and wealth Risk Management Lens 4 RETAIN RETAIN 2 AVOID 1 REDUCE 3 TRANSFER Structural People Family Financial Timing Communication 1. We need to get clear first 2. We need our plan sorted first 3.How do I communicate to family How do I communicate to extended family, spouses, partners etc Who owns what Mum & Dad, dreams & aspirations Non alignment How much do Mum & Dad need What s the plan on timing handover for income, equity & control Is our structure fit for purpose Communication Adult children, dreams & aspirations Dollars they might need for the capital required Disinterest or distrust Are we asset protected & tax efficient When are we ready to retire Self-righteousness Relationship issues, divorce Charities Expectance How does structure allow for handing over control Can I retire & still participate on the board Family breakdowns Loans to children Participants don t want to get involved Non interested children Children employed in business V s not employed How do we keep everyone in the loop CGT & tax considerations Financial mismatch - some have money, some don t When does a family member/s take over Interested & can t manage the money Do people/family need to sign a non- disclosure document Are our structures future proof Distribution and income in he future Fair V s Equal How do I know with confidence it s time Divorce Health Issues So they represent our wills & estate planning What happens if I die or lose capacity now Is there a forum for people to discuss concerns & disagreements Control issues Income & capital distribution Staff issues, retaining good people Can we easily report across the group What s the back up plan Reporting of finances Communication issues What happens if family disagree Investment decision making now & in the future Required documentation: Should we have a fire drill Mismatch of values and trust Wills & estate wishes What happens if 1 person is seen to be favoured I need all this in place now All loan documents Investment advice Revised structures Who to seek advice from How long does this take How can we make this robust All other agreements Debts, guaranties, warranties

  11. Here is the start point Use of 4 L s & One Page Plan

  12. CONTEXT 10-3-Now Mr & Mrs Client Love Learn Legacy Live NOW 3 YEAR GOALS 10 YEAR GOALS TO DO LIST Wills and Estate Succession Succession Mr & Mrs Client Ages: 65 Children: 3 Family Rule Book Estate OK Fair Not Equal Grandchildren: 5 Business Succession Kids on Track Deal with Son in Business Asset Protection Retired Look After Kids Residence Value: ~$5 million Family Advisory Board Not Country Club Kids Governance Look After Grandkids Investment Value: ~$5 million Business Plan Complete Retire Gracefully Property + Maybe Sell/Merge Business New CEO Company Long Term Incentive Plan Finalise Loans to Kids Trust 1, Trust 2 ~$10 million Review Guarantees & Warranties Farm Review Debt & Liquidity ~$20 million Value: ~$20 million Staff: 80 Business 1 son is in business Superannuation ~$5 million

  13. What does a 12 month agenda look like For: Passive Assets Passive + Business assets

  14. Sample 12 month agenda Aging Matriarch/Patriarch Passive Assets Q1 Q2 Q3 Q4 Set direction Matriarch & Patriarch are participants in meetings Family clear on direction Scope Matriarch & Patriarch Develop 10-20-100 year plan Issues list identified Training program Income & capital needed Agree with Matriarch & Patriarch direction Engage in family meeting Income sorted Family Rule book being developed Wills & estate documents completed Succession debated and decided Communication plan clear Matriarch & Patriarch wishes & aspirations Equity/structures for succession Release of some control Interview children for future roles Anoint a champion Understand asset & structures Advisory board skills required Monthly meetings Family meeting Live, Love Learn, Legacy for Matriarch & Patriarch Maybe building the family office Roles identified Develop legacy plan Reporting clear and robust Financial reporting Children s Live, Love, Learn, Legacy Family financial meetings underway Understand risks Reporting Understand reporting & decision making Wills and estate documents underway Keep functionality with family office rules Risk management framework in place Family Rule book considered Discuss family office roles

  15. Sample 12 month agenda Significant Individual or Family Business Assets Q1 Q2 Q3 Q4 Monthly business meetings Full board working Due diligence ready 4 L s; Live, Love, Learn, Legacy Staff Issues Long term incentive plan Key documents; wills and estates Family rule book Monthly reporting Decide to keep or sell the business Staff engaged Across issues Understand financials Mergers & acquisitions Leadership training Feeling confident Understand risks Risk Management framework for the business Document the strategy Robust reporting Rules & functionality Structures Issues list identified Developing culture Recruit Best of Breed team Board papers commencing Robust financials Risk management overlay Determine skill set required Structure in place Personal: Monthly meeting Personally well organised Wills, estates updated Functionality of roles Financial advisory meeting Succession documents Investor ready Powers of attorney Structure sorted Due diligence ready Long term incentive plan

  16. Sample Board/Business Plan NOW 1 YEAR 3 YEARS Family owned 90 Day Rocks Succession in place 80 staff Get an advisory board Merged or sold Key Person dependant Roles, Functionality Not keyperson 1 family member CEO Review HR Dad retired 1 part-time 1st Board meeting Kids treated equally not fairly Succession needed Good governance framework Key Person Risk Investor ready 90 Days Governance? HR tight Key Staff Engaged Profitable Risk Management known Long term incentive plan for key people Guarantees & warranties unknown Board in place Board meetings Banking not good Double profit CEO reports No HR policy Valuable Strategy Little marketing Options No SWOT Agreements No risk management frameworks Marketing Governance Culture

  17. 12 Month Review document

  18. Annual Review Meeting Jack and Jane Citizen

  19. Start Point Book in now for 10-3-NOW planning session

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