Is your family business prepared for the future?

While a fair proportion of SMEs have their hands full with the present, they still need to take time to consider where the future will take their business. 

This is especially true for family businesses where the owners are planning to cede control to their children or other relatives when it is time to move on. With business development being as much about preparing for the future as it is reacting to the present, are Australian SMEs prepared for what comes next? 

EY looks to the future

A recent report from analyst Ernst & Young (EY) discovered that Australian family businesses have a positive outlook for the future in general, with more than two thirds of those surveyed predicting a market expansion in their chosen industry. 

Despite this, all is not necessarily well, as the firm believes this positivity may come at the cost of turning a blind eye to other factors creeping up on these businesses. 

According to EY's Oceania Leader for Family Office Services, Richard Boyce, half of the country's family businesses are yet to be passed on from the first generation. Because of this, succession planning should be a key consideration for these businesses moving forward. 

"Succession is arguably the most critical issue a family business has to face, yet it is often one of the most difficult to navigate," Mr Boyce said.

"Complicated family dynamics and the emotional connection that business leaders and family members feel towards their companies can make addressing the issue a potential minefield."

EY advises that – if business owners are looking to pass the company on to the next generation – succession planning needs to be ingrained in daily operating procedures. This ensures when a business is ready to be handed over the recipient is trained and capable of continuing its legacy.

The firm also states that these discussion need to be conducted openly to keep all family members and other key business personnel on the same page.