FAMILY BUSINESS SUCCESSION

What do you do if you cannot find a successor or a buyer for your family business? Sell to your skilled and experienced workforce! “It’s an answer you may have been looking for.”

57% of family businesses have acknowledged that they would have no choice but to cease trading within one year of a severe illness or death of a current owner.

Only 42% have planned for the family business succession.

Family Business Succession Options

Model 1. “Recycling dad” but what if no one is willing or able to step into dad’s shoes?

Model 2. Next Generation ownership and management

Model 3. Have active next-generation owners with a non-family management team

Model 4. Trade Sale or find a private equity investor

Model 5. Management Buyout – Then the question arises; Can the business then sustain another MBO when the managers/owners are ready to retire?

Model 6. Employee Ownership

                6a. Create some liquidy with a minority employee ownership stake. This unlocks … Read more

WHY ARE THERE NOT MORE EMPLOYEE-OWNED BUSINESSES IN AUSTRALIA

After attending many business functions, seminars and conferences, I have found that business owners in Australia are unfamiliar with employee ownership. Even my accountant initially advised not to proceed with an employee-owned cooperative, due perhaps to a combination of inexperience and a warped perception that cooperatives were too tricky and complicated. He later told me “cooperatives were in his toolbox under dairy farmers”.
Our C-Mac experience has shown that:

  • The owner rarely thinks of selling to all the employees
  • Owners don’t consider that employee ownership represents another succession option
  • The owner does not consider that management and employees possess the requisite skills to run the business
  • Owners are concerned about losing control of their company
  • Accountants do not understand employee-owned companies
  • Most economists and professionals have limited knowledge or understanding of the benefits of employee ownership and don’t consider them as serious alternatives to conventional corporate structures
  • Management Buy-outs often receive priority consideration
    • Management is in the driver’s seat with
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