Robyn Donovan | 17/03/2009 4:54:01 PM

If you own a business the process of planning your retirement may involve either selling your business or handing over the management of the business. A succession plan can provide the opportunity for the next generation to take over the management of the family business or alternative management can be put in place. Of course it is important to determine what your preferred options are in retirement and to provide opportunities for negotiations with the other parties involved.

One of the initial things to consider is whether to hand over the management of the business alone or include the sale of your equity as part of the succession plan. This decision will depend on a number of factors, however it is important that you have developed a plan which ensures that the transition is a smooth one.

In any business, personal relationships can be both a great strength and a weakness. The quality of these personal relationships will have a significant impact on the success of otherwise of the succession plan. The inter-relationships of business and family and the inherent complexity can often produce interpersonal issues that require addressing. When there is more than one family involved it is sometimes recommended that an experienced consultant is engaged.

While the “hard” or the financial issues can be identified and resolved by the business experts, the “soft” issues usually require more sensitive approaches. Often, we have found that the inability to resolve the “soft” issues can have a significant impact on the outcome of the succession planning process.

If you require assistance in developing a succession plan for your business, contact us on 07 49204600 or email enquiries@capinvest.com.au

The Investment Collective (AFSL 471728) is a non-aligned financial planning and investment firm specialising in providing tailored financial and investment advice for individuals and small business. Capricorn Investment Partners Limited's services include financial planning, share trading, portfolio management, insurance broking and self managed super fund administration. Additional information on services provided by The Investment Collective Limited can be found by following this link. Readers are reminded that this document has been prepared for general information purposes only, and any advice contained herein has been prepared without taking into account your financial objectives, situation or needs. Readers are advised to see their financial advisor prior to acting on any general advice.