Family Business Succession is never a simple, straightforward endeavour. Besides the financial outcomes of the transition, the human needs and emotional involvement of all family members must be taken into account. The business advisory firm Baker Tilly International, in cooperation with Swinburne University, has taken a closer look to both the sociological and economical implications for the family business succession process and presents its first results to you in this article.
The Scene: Risk and Opportunity
In just seven years the global baby boomers population (born between 1946 and 1964) will be aged between 56 and 74 years, weighted heavily towards the higher end, and most businesses controlled by them will have changed hands. In Australia the value of businesses to be transitioned was estimated in 2006 at $A3.5 trillion1 on a population base of 19.85 million people.
For business people, this transition represents a period of great risk and opportunity. A risk for those exiting to secure a fair capital value and continuity of their businesses, a risk for the economies in which they trade should they flounder in this transition and an opportunity for the new generation of owners to consolidate and build upon the generations of knowhow and value possessed by these businesses.
Enter the realm of Family Business Succession where there is really no clear guidance for owners as to how they should approach this critical point in their business’s lifecycle. Baker Tilly International, leveraging off the work of its independent member firm in Melbourne, Australia in conjunction with Swinburne University in Australia and the conduct of a three year research project into the success strategies, barriers and dynamics of family business succession, is undertaking a global survey to support and extend this research. This article takes a ‘first look’ at the findings that are emerging from this survey, which will continue to be conducted until June 2013.