This document summarizes a presentation about transitioning a family-owned business to the next generation. It discusses that 70% of Australian businesses are family owned, and that baby boomers are at the age where succession decisions need to be made. It emphasizes that wealth transfer fails for 60% of families due to inadequate training of heirs, 25% due to a range of legal/tax issues or poor advice, and 15% due to breakdowns in family communication and trust. The presentation recommends starting the succession process early, establishing strong governance structures like a family charter and board, and focusing on building family relationships through open communication and family meetings.

1. NEW L. J. COMMERCE
COLLEGE
COURSE : B.COM
SEMESTER : 6
NAME : Parmar Krishvaba
ROLL NUMBER : 202
DIVISION : C
SPECIALIZATION : Business Analytics
PROJECT SUBMITTED TO : AVNI MA’AM & MAYURI MA’AM
DATE: 27-03-24

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8. How to Transition a
Family-Owned Business
Presentation by
KRISHVA
Wednesday 26th December 2019

9. Lets Set The Family Business Scene
70% of Australia’s 2.1 million business are family owned
Mainly, sophisticated, successful and smart – Their Dollars!!
Baby Boomers – Decision Time is Now!

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11. • 70% of Australia’s 2.1 million business are family owned
• Mainly, sophisticated, successful and smart – Their Dollars!!
• Baby Boomers – Decision Time is Now!
• Challenges ahead – Elephant in the Family Lounge Room
• Rich Listers and other Wealthy Families – Fractured Families List
Lets Set The Family Business Scene

13. 12
FRACTURED FAMILY
LIST
2019

14. Pointmade’s Principles
Wealth of your family is not your Balance Sheet
It’s each and every family member around your table
Critical challenges for families arrive from wanting a harmonious, united and
happy family
These challenges are mainly relationship and family based – not financial based.
You must professionalise the family in the same way as your business
You must devote time, effort and resources into improving the health of your
family as evidenced by the communication and relationships that exist within
the family
Think long term for your family aspirations
Quality of our lives is primarily determined by the quality of our family
relationships!!!

15. Start now – it’s a process not an event
Build your family pyramid
How to successfully manage generational
transfer of Family Business

16. Governance
Guiding principles
Family culture
Board
Rules
Charter
Communication
Decision Making
Relationships
Vision
Values
Purpose
Our approach
Pyramid of family business success
Every family has a story,
only a few leave a legacy

17. Start now – it’s a process not an event
Build your family pyramid
Connect – Communicate – Build Trust
Coach / Educate your children
Structure and Governance are essential
Family Meetings – Rules – Independent Chair
How to successfully manage generational
transfer of Family Business

18. How to successfully manage generational
transfer of Family Business
Summary:
Prepare a succession plan
 Comprehensive – family / ownership / management
 Strategic – plan business / family view
 Feasible - realistic

19. Unique Traits and Challenges Within
the Family Business Sector

20. 6 DON’TS
3
Don’t train or educate
their children about
wealth or business
5
Don’t deal with
conflict. They keep
conflict in the
cupboard
6
Don’t understand the
importance of good
governance
Don’t understand that
succession is a process
not an event
4
Don’t spend time on
family issues just
business issues
1
Don’t discuss wealth with
their children on a regular
& effective basis
2
My experiences from having been involved with family businesses for more than 40 years and having met
over 300 high net worth individuals and families over the past 7 years have confirmed some major issues.
Generally families:
Every family has a story,
only a few leave a legacy

21. 70% of Wealth Transitions Fail
And the origins lie within families themselves
Fail due to
inadequately trained
heirs
Fail for a range of
reasons - tax, legal
or poor advice
Williams & Preisser,
“Preparing Heirs”
60% 25% 15%
Every family has a story,
only a few leave a legacy
Fail due to breakdown
in Communication and
Trust within the family

22. 1. Succession Planning raises unpleasant family issues.
2. Succession forces people to confront their mortality.
3. People are too busy doing day-to-day tasks.
4. The owner fears suffering loss of control.
5. The owner fears that a succession plan will reduce options.
6. They don’t know how to plan.
Reasons People Avoid
Succession Planning

23. How to prevent family tensions and
differences from becoming conflicts
Conflict is a disagreement perceived as a threat to the needs, interests, and concerns
resulting from individual that differ in attitude, beliefs, or values.
The difference between a disagreement and conflict are the negative and lingering
emotions – anger, fear, guilt, shame and jealousy
Can we get parties to agree that is not as important to be right as it is to reach
genuine understanding and agreement to move forward.
Can we get parties to agree to process to understand themselves before we try and
solve problem.
Set up family structures and processes
Family Meetings – unpack your suitcase
Role of the trusted, independent Chair/Advisor

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28. THANK
YOU