The tsunami of baby boomers retiring is threatening the life-span of many family businesses
Succession planning key for family jewellers
Posted September 07, 2010 | By Sonia Nair
A tsunami of baby boomer retirements is forcing family-run jewellery businesses to push succession planning up the agenda, retailers heard at the Sydney trade fair.
Jon Kenfield, founder and chief executive of conflict management consultancy The Solutionist Group, told jewellers that baby boomers in their late 50s and early 60s own up to $4.6 trillion worth of assets that are due to be sold or handed down to younger family members.
In his talk on the second day of the Sydney trade fair, he said it was vital for families to appoint a succession team and complete the process of handover within an established time frame.
If an ill-advised succession plan is put in place, the exit options could range from a liquidation or fire sale to a merger or alliance with a competitor business.
“The succession plan is a transition process instead of an event. Ideally, it should be a five-year process which sees the legacy, pride and sacred trust of a family business continuing on to the next phase,” he told jewellers.
Having dealt with family businesses for more than 20 years, Kenfield outlined 10 golden rules for succession. Among them he advised outgoing business leaders to create an appealing life for themselves post-handover, and to have realistic expectations of their family members.
The best way for outgoing business leaders to deal with the momentous change, he said, was to stay minimally involved in the business instead of retiring completely.
“Life expectancy has been proven to decrease after retirement if you don’t have a clear idea of what you want to be doing after retirement,” Kenfield said.
He called a family business an “ultimate oxymoron” because the typical business model of intense competition and merit-based remuneration were incongruent with nurturing family values. He advised jewellers to set up a separate family council and business board so that the two spheres stayed as disconnected from each other as possible.
Kenfield’s family business succession presentation was the keynote speech at this year’s Sydney trade fair.
Succession planning will also be covered at the New Zealand Jewellery Fair where Stacey Davis, Business Advisory of Grant Thornton will be presenting a seminar titled, "Succession Planning for the Family Business" on September 25 at the ABS Showgrounds, Auckland.
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