Succession planning is about futureproofing your business. It ensures a seamless leadership transition, without negatively impacting operational efficiencies or profitability. For family businesses – which make up a large portion of HIA’s membership – succession planning can create a financially secure future for the next generation. 

While many business owners are too busy planning next week’s workload to worry about who’ll take the reins in years to come, planning for the future delivers immediate and long-term benefits. The 2021 Family Business Survey* revealed that ‘transition ready’ businesses, with formal plans and conflict-resolution mechanisms in place, are more resilient.

So, it makes good business sense to start devising a succession plan earlier, rather than later. 

There’s no single formula to follow when developing your plan because every business and situation is different. However, common elements include communication, a focus on skill development and putting robust processes in place.

A bouncing ball

‘If you build a business right from the get-go, it’s a bouncing ball that anyone can come in and follow,’ says Chris Bosley, Director of Sales and Marketing at Amorini Australia.

Amorini is a family-run, solutions-focused outfit that sources and supplies joinery components to kitchen companies. Planning for succession has informed how the company has been run, and its overall success, from the outset. Founded by Managing Director Steven Bosley and his brother-in-law Paul Atkins in 2004, the business was ‘built to sell’, says Chris. 

‘It wasn’t that they had the intention to sell, but when you build a business that way, you've always got the best systems and the best processes in place. This gives you the ability to pass that on as a saleable item when the time is right.’ 

Chris and his brother Mitch Bosley (who are Steven’s sons and Paul’s nephews) joined Amorini around 2010. Degree-qualified and experienced, they started, as many do at Amorini, in the warehouse and learned from the bottom up. After a few years, ‘a succession plan was coming into place that was going to be a staged rollout over a significant period of time’, Chris says. When Paul retired in 2019, Chris and Mitch were ready to buy into the business, helming the Sales and Marketing and Operations departments respectively. 

‘Those strict systems and processes were in place, so it enabled us to move into the business really neatly.’

Room to grow and learn

Good succession planning involves taking a long-term view and equipping key personnel with the skills to carry the business along its existing trajectory, and eventually oversee its growth or diversification. Industry veterans Eric and Felicity Prior established Crest Building in 2010, specifically with a view to handing it over to their sons in the future. Here skill development is a big part of their succession strategy. 

‘After the GFC, we decided to start the business to help our youngest son complete his apprenticeship,’ Eric explains. Two more of the couple’s six children have also done their apprenticeships in the family business, which specialises in boutique residential construction. Each is encouraged to follow their own path of expertise. 

Their eldest son, who has a degree in business management and marketing, has almost completed a qualification in commercial construction, and the youngest now holds a Certificate IV in Building. ‘They’re certainly getting the training that’s needed to progress the business and take it in a different or bigger direction as they mature and we step out,’ 
Eric says. 

At Amorini, Chris and Mitch had similar opportunities. ‘We were given time to build our way up through the business, to form our own industry networks and create our own path,’ Chris says. This is a great example of where succession planning offers ongoing benefits for the business: ‘Amorini’s motto is “helping others grow”. Brightness to the future is everything. We offer team members succession within their roles. The opportunity to grow their skillsets and develop helps us build a strong, stable workforce and futureproofs the business.’

Respect the dynamics 

Succession planning ‘is not just managing roles; is not just managing people, it’s managing personalities, especially within the dynamic of a family’, Eric says. When the time comes to pass the baton on to the next generation, he says clarity and communication are essential. 

‘We want to make sure the plan is clear and everybody’s on board. It’s important to have a structure that is external, as in a Board, to help steer the direction of the business in the long term. Being first and foremost family, our primary concern is that there’s no conflict between the siblings.’ 

Eric says the process will be different for everybody. ‘It’s very personal because it depends on the family. There has to be respect there. When everybody’s of the same mind to build up the business, it’s definitely an advantage.’

Successful succession

As successors within the family business, Chris says he and Mitch felt the weight of responsibility as they took up more senior roles within the company. ‘In the early days it was intimidating because we needed to prove ourselves – not just within the business but also within the industry.’ However, thanks to the foundations put in place by Steven and Paul, the pair are thriving in their roles, and Amorini Australia is flourishing. 

As for the future, Chris says that when the time comes, he’ll let his children find their own paths. ‘If our kids decide they want to come through, beautiful. They’ll have every opportunity. But if they choose not to, we’ll stick to the same systems and processes to give others an opportunity to grow within the organisation. 

‘And if all else fails, it’s always been built to sell.’

* Source: Family Business Survey 2021

Where to find help

Succession planning also entails legal and financial elements, such as taxation and estate planning. You should seek guidance from a lawyer, accountant or financial adviser to ensure your handover plans are correctly structured. 

For more information, visit Business online from Australian Government or Family Business Australia.

Published on 24 November 2022