Family businesses are very rewarding but they also come with miscommunication or tension as circumstances change and the management is turned over to the next generation. Some of the common challenges that can arise are: making financial decisions between generations, retirement planning, succession planning, asset protection and formalising business plans and financial matters.
The founding generation often has a different approach to the next generation that will follow their footsteps. A Perth business accountant can offer impartial advice based on the numbers and not on emotions.
Another challenge in arranging the business’s finances is making sure the founder will have a long and comfortable retirement without taking vital resources from the ongoing business. You can structure savings and retirement funds so the business won’t pay more tax than required. It is good to start retirement planning early for all generations within a family business. The sooner you talk to your financial planner, the better.
The founder of the business has worked hard to build up the company’s equity but about 70% of family businesses still sell or fail before they are turned over to the younger generation. It’s good to plan the steps to succession so the business will not suffer a negative impact by a turnover. It’s worth speaking with your legal and financial specialists about succession.
Family businesses aim to protect their wealth and assets not only by carefully positioning legal ownership to safeguard assets against liabilities but also planning tax and business structures such as trusts. Talk to your family asset protection company each time there is a change in circumstances to make sure the right financial measures are still in place.
It’s easy to make informal plans but these often lead to frustration, uncertainty and misunderstandings. Your financial planner and accountant can help you with clear plans and written strategies so everyone remains informed and working towards the same goals.
What can you do?
If you would like to know more about small businesses, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more.
Whether you are a beginner, seasoned investor or business owner, we can give you guidance to maximise the financial areas of your life. We can give you an integrated and tailored solution of your superannuation, taxation, property investment, asset protection, estate planning and more.
Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.