The latest survey that measures the succession readiness as well as the important areas that impact the growth, performance, governance and transition of Australian family businesses.

1. Succession
Masterclass
June 2018

2. Family Business
Succession

3. Monthly
Series
Date Topic
Feb 8, 2018 Why Succession Planning? Market research and
trends and The Psychology of Succession
Mar 8, 2018 Business Valuation Tips and Traps
Apr 12, 2018 Structuring for Succession – Who owns what?
May 10, 2018 Small Business CGT Concessions
Jun 14, 2018 Family Business Succession
Jul 12, 2018 Maximising Value – What are buyers worried about?
Aug 9, 2018 ESOP as a Succession Option
Sep 13, 2018 Strategic Sales – What are buyers attracted to?
Oct 11, 2018 M&A Process – Tips and Traps
Nov 8, 2018 Action Plan – How to help your clients and attract new
clients
Succession Masterclass Series

4. Craig West
CEO & Founder
B. Bus (Mgmt.), M. Bus (Acct/Fin),
M. Tax Law, CPA
Craig’s practice Succession Plus is the largest Business
Succession and Exit Planning firm in Australia and provides
mentoring, advice and strategy for clients looking to prepare their
business for a successful exit.
In March 2014, Craig was appointed Executive Chairman of the
SME Association of Australia, an organisation focused on
improving the success of SMEs in Australia.
In October 2014, he was awarded the Exit Planner of the Year at
the Exit Planning Institute Annual Conference in Texas, USA as a
result of his innovative development of an exit planning process to
help business owners maximise business value and achieve a
successful exit.
During 2015, Craig commenced a Doctor of Business
Administration on the topic of using Employee Share Ownership
Plans (ESOPs) as a Business Succession and Exit Planning tool.
Craig’s proprietary structure - a Peak Performance Trust - has
won the Australia-wide award for the Employee Share Ownership
Plan of the Year twice in four years.

5. Donald Poole started his career in 1974, starting at a suburban accounting practice. In
1980, he opened a small office in Mooloolaba on the Sunshine Coast. The business expanded
rapidly and in 1983 and 2007, the firm moved premises to cater for its growth. Don’s personal
business, The Poole Group, now has 7 partners, 38 technical and 10 support staff and handles
Taxation, Accounting, Audit, Business Management, SMSF and Investment and Insurance Advisory
Services. Don has assisted countless business owners through a successful exit, with his client
base representing a broad section of industry types and sizes.
Scott Patterson has extensive business and professional experience, including over 20
years as a principal of a highly successful public accounting and financial planning firm. His passion
is working with clients to improve the value of their businesses, and create a more certain future for
them, their stakeholders and their families. Scott utilises strategic thinking, tailored advice and
integrated solutions to enable business owners the freedom of determining the time frame and
method in which they exit from their business, often their most valuable asset. His expertise
stretches across all areas of small to medium enterprises (SME), including agricultural enterprises.
B. Bus (Acct),
FCPA, GAICD
B. Bus, CPA,
CTA
Succession Plus Partners

6. Succession Plus Accredited Advisers
We currently have 26 accredited advisers in most capital
cities and several regional areas/country towns who have
been through our training and accreditation program, and
we are still actively recruiting new advisers in many areas.
Please visit our page for more information:
https://services.successionplus.com.au/accredited-advisers-
recruitment/

7. Succession Plus’s
Proprietary 21-Step
Business Succession
& Exit Planning Model

8. Intro Australian
Family Businesses

9. Family – many combinations - friends, siblings,
husbands/wives, cousins, nieces, step-families,
adopted families, in-laws, partners.
70% of Australian businesses are family owned.
Breaking the stereotypes

10. Good communication between family
members is vital to boost the sustainability
of the business and wellbeing of the family.
Family communication

11. Communication is a key factor in
‘socioemotional wealth’ (SEW) –
a measure of the non-financial or
the ‘emotional value’ for the family.
Family communication
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

12. Family and influence
Identification with the business
Binding social ties
Emotional attachment
Renewal of family bonds through dynastic succession
SEW is made up of:
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

13. • Future growth and performance
• Transition strategies
• Confidence and commitment
• Governance for the future
Areas that impact SEW
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

14. • Financial stress
• Managing growth
• Decision-making process
• Future vision
• Succession-related issues
• Sibling rivalry
• Communication style
• Remuneration of
family members
• Competence of family
members
• Balancing the needs
of family and business
Sources of conflict
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

15. Succession
Strategies
Succession is not a singular
event, but a process of
transitioning the family
business into its next stage
of development.

16. Two key transitions
• Management
• Ownership
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

17. Management succession strategies
29% had no management succession strategy
(current leaders less than 55 years old)
8% had no strategy (owners intend to sell)
63% had a management succession strategy
in mind.
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

18. Management succession strategies
60% plan on passing on leadership to a
family member
34% plan on passing on leadership to a
non-family member
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

19. Management succession strategies
18% looking to pass on the business
in the next 12 months
54% looking to pass on the business
in the next 2-4 years
28% looking to pass on the business
in the next 5 or more years
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

20. Ownership succession strategies
32% had no ownership transition strategy.
Of those that did:
63% intended to pass the business on solely to
family members
5% intended to sell a minority share to
non-family
3% intended to sell a majority share to
non-family
24% intended to sell or close the business
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

21. Ownership succession strategies
10% looking to undergo an ownership change
in the next 12 months
30% looking to undergo an ownership change
in the next 2-4 years
60% looking to undergo an ownership change
in the next 5 or more years
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

22. Planning for management succession
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

23. Planning for ownership succession
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

24. A number of future leaders expressed
‘being in the dark’ about the future of the
business and how to best prepare for
potential roles.
Succession strategies
The 2018 KPMG Enterprise and Family Business Australia Survey Report.

25. Triggers
1. Professional advice recommending succession
2. Current incumbent (generation) being ready to
transition
3. Incoming generation – “ready and waiting.”
Most common advice from respondents: “start earlier”

26. Principal outcomes
1. 86.6 % Continuity of the business
2. 73.5% Family harmony
3. 72.7% Ongoing employment for employees
4. 61.2% Keeping the business in the family
5. 49.0% Leaving a legacy
6. 30.4% Selling the business for the best price

27. Barriers
1. Ensuring the fair distribution of assets among
family members
2. Capacity of the business to provide adequate
financial returns
3. Capacity of the business to support retirement
4. General economic uncertainty
5. Capacity to support the next generation

28. Dynamics
Family dynamics – succession is not retirement
Evolution of priorities
Advisers and our role

29. How?

30. BUSINESS
SUCCESSION
AND EXIT
PLAN
Stage One:
Identify Value
Stage Two:
Protect Value
Stage Three:
Maximise Value
Stage Four:
Extract Value
Stage Five:
Manage Value
21-Step
Business
Succession and
Exit Planning
Process

31. XYZ Pty Ltd XYZ Pty Ltd XYZ Pty Ltd XYZ Pty Ltd XYZ Pty Ltd
as of today
after closing the
profit gap
after achieving
best in class (EBIT
of 12%)
if attractiveness is
improved
if sold to a listed
company or a
strategic exit
Revenue $6,514,811 $6,514,811 $6,514,811 $6,514,811 $6,514,811
EBIT $347,591 $570,555 $781,777 $781,777 $781,777
Multiple 3.7 3.7 3.7 4.5 5.0
Valuation $1.3M $2.14M $2.93M $3.52M $3.91M
$1,301,756 $1,301,756 $1,301,756 $1,301,756 $1,301,756
$840,000
$1,630,000
$2,220,000
$2,610,000
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
Valuation as of today Valuation after closing
the profit gap
Valuation after
achieving best in class
(EBIT of 12%)
Valuation if
attractiveness is
improved
Valuation if sold to a
listed company or a
strategic exit
Value enhancement Value today

32. “I don’t like the word ‘dynasty,’ but that’s
what it is. It’s not just a business. There’s a
lot going on in the background.”
— Jake Dyson, Heir Apparent to James Dyson

33. The Three-Circle Model

34. Ownership – Shareholders meeting
Business – Board of Directors, management
Family – Family council
Communication models and structures

35. Family Council

36. “We have to collect our thoughts and desires and
expectations for the business and share those with
one voice instead of 100 different voices.”
- Stacy Mello, Senior Director of Planning and Communication at A. Duda & Sons
Inc. and Chairman of the Duda Family Council (Family Business Magazine,
January/February 2016).
Family Council - Key Roles & Concerns

37. Family business is like all others, they need to
prepare for exit, but they are also very different.
• Key risks for family owned businesses that reduce
valuation
• Key person (family) dependence
• The sale process and managing stakeholders
• 21-Step Business Succession and Exit Planning model

38. The #1 issue
for Australian
family business
succession?
Funding! $$$$$

39. “A successful business is often the best thing that can happen
to a family – and the worst.“
“There often seems to be nothing scientific about the
management of a family company. Much of what goes on is
rooted in emotion, and succession is the most emotional issue
of all. Business professors hate this kind of situation;
psychiatrists thrive on it.”
“The biggest challenge in family businesses is the patriarch who
lingers too long.”
(Gordon Pitts – “In the Blood – Battles to Succeed in Canada’s Family Businesses”)

40. Conclusion

41. Accredited Adviser Recruitment
We are actively looking to recruit in the following areas throughout Australia. Visit our website
successionplus.com.au or email cwest@successionplus.com to find out more about this offer.
NSW
• Armidale
• Bathurst
• Bowral-Mittagong
• Coffs Harbour
• Dubbo
• Goulburn
• Hills District
• North Shore
• Orange
• Port Macqaurie
• Tamworth
• Wollongong
WA
• Bunbury
• Busselton
TAS
• Hobart
• Launceston
NT
• Darwin
VIC
• Albury
• Ballarat
• Bendigo
• Geelong
• Melbourne
• Mildura
• Mooroopna
• Shepparton
• Wentworth
• Wodonga
QLD
• Brisbane
• Bundaberg
• Cairns
• Mackay
• Rockhampton
• South Gold Coast
• Sunshine Coast
• Toowoomba
• Townsville
SA
• Adelaide

42. Adviser Masterclass Series

43. Don’t miss these upcoming webinars…
Register thru https://services.successionplus.com.au/events/
Date Topic
Jul 12, 2018 Maximising Value – What are buyers worried about?
Aug 9, 2018 ESOP as a Succession Option
Sep 13, 2018 Strategic Sales – What are buyers attracted to?
Oct 11, 2018 M&A Process – Tips and Traps
Nov 8, 2018 Action Plan – How to help your clients and attract new clients

44. Questions…

45. p 1300 665 473
e cwest@successionplus.com.au
w successionplus.com.au
Head Office
Level 3, 50 York Street
Sydney NSW 2000
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