Transition timeframes and expectations
Generational succession is often a process rather than an event, achieved over an extended period of time.
This is quite different to a sale of business where the owner’s active involvement in the business generally ceases shortly after sale.
The extended timeframe for the transition requires active management to ensure that there are mutual expectations and to avoid the process being derailed through frustration.
The exiting generation may have identified that they want to scale down their business involvement and bring on other family members to succeed them. This does not necessarily mean that they want to withdraw completely. An extended transition period is not uncommon and can often assist the business in managing the change. This can also work well in managing income and capital withdrawal requirements.
The critical issue here is to identify and ensure that all of the parties have a common understanding and acceptance of the time period over which the transition will take place. This should be included in the documented succession plan, with which Mitchell Partners can help. Call us on 03 9895 9333 today.