It seems like the perfect partnership – a sibling or relative as your small business partner, similar values, similar enthusiasm, complimentary skill-sets. What could go wrong?
Well, a lot actually. As Family Business Australia state – 70 percent of family businesses fail or sell before the second generation takes over. And 90 percent of family businesses fail or sell before the third generation takes over.
So how do you avoid being one of the statistics?
It comes down to knowledge transfer, strategic business planning and communication, but mostly importantly – succession planning.
Succession planning may be one of most important factors and challenging experiences that a small family business face, especially if you’ve built the family business from scratch. Therefore it is crucial to get the process of succession right. Treat succession planning like it is urgent, because it takes time. A good succession plan can be the first step in maintaining the strength of an enterprise and the family’s prosperity for generations to come.
Your successor may possess the skills needed for the core business activities. It is also important to have knowledge of business planning, sales, marketing, operations, monitoring tools, human resources management and managing finances. These skills will complement existing knowledge and ensure sustainability in business operations.
If you want to know more about what business courses can help your family business, then you have come to the right place. Learn about key concepts like this in our Certificate IV New Small Business – tailored for family business. Call our friendly course consultants on 1300 738 955 to find out more.
Authors: Louise Hudson and Harry Prasad