Next-generation plan crucial Emma Blake Gymnast son takes reins
STARTING a business is a momentous event in any small company owner’s life.
What follows is a long, consistent effort to make the business a success and keep it that way.
But when it comes to deciding what to do with that company when the founder has had enough, more thought and energy is required.
Small and medium-enterprise owners say business planning is their biggest concern while succession planning is their second biggest worry, Prosperity Advisers’ 2016/17 SME Research Report found.
A business can be all-consuming mentally, physically and financially. An owner’s home and super are often tied up in the company’s capital and if they want to realise that capital they need to put a strategy in place very early, according to Allan McKeown, co-founder and chief executive of business and accountancy firm Prosperity Advisers.
“Many might have an idea (about succession) in the back of their mind but those that make a plan will incorporate it as a part of due process and have a proper rigorous think about it,” Mr McKeown said.
He said there were two aspects to succession: managerial succession where you recruit talent into the business to grow it, or to eventually run it; and how to realise the capital invested in the business so you can retire.
No matter how small your operation, Mr McKeown advised seeking external advice from an expert or a trusted mentor.
“Have a catch-up every three, six or even twelve months about how the business is going and what your options are,” he said.
It is also important to have a solid understanding of exactly how much your business is worth and, if you are planning to sell it, not to leave it too late.
“People have an opaque view of what their business is worth. You might be forced into selling it sooner than expected due to illness or financial misfortune. That creates pressure and you may have to sell at a value that’s less than you were hoping for,” Mr McKeown said.
“As early as possible you need to start diversifying your investment, which is hard when you are investing everything into growing a business. That might include adding money to savings, super or an investment property.”
Family business adviser Philip Pryor agreed that planning well ahead was key to an effective succession plan.
“In a family business you need to be thinking at least 40 years ahead,” Pryor said.
If you do plan to pass the business on to the next generation, or hire an external chief executive to run it, you need to make sure the founder has a role under the new leadership. IT was always going to be hard for Val Norris-Buffham and husband Ken Norris to leave the Jandakot academy they built together, considering the effort they put into making it successful.
In late 2014 Mrs Norris-Buffham, a dual Olympian, promised a trip to Singapore for the Prime Gymnastics International Invitational was to be her last overseas trip as head coach of Olympic Fun and Fitness.
In her words, she was passing the baton and easing off from a role she had held for four decades.
Fast-forward two years and the pair was finally able to take that well-earned break when their son Damien Norris, a Melbournebased lawyer and former national champion gymnast, decided it was time to come home and lead the business at the end of 2016.
It was a great result, with the Murdoch couple having considered closing it down.
“It blew us away. We were very pleased,” Mrs Norris-Buffham said. “He's updated everything. “I said to him I now know how top athletes feel when they drop out.
“But it got to the stage where the updates were needed. ”
Mrs Norris-Buffham, who competed at the Tokyo Olympics in 1964 and the Mexico Games four years later, said she had not stepped back into the academy since handing over the reins.
Damien said a lot of the changes were cosmetic, with a move to automated systems and a bigger online presence. The academy has also introduced its “Wilding Project”, a move into parkour, free running and natural movement.
Damien said there had been a shift from gyms with dumbbells and weights to gyms that focused more on expanded body movement.
For information, visit www.olympicfunfitness.com.au.
Val Norris-Buffham with gymnast Irina Hong (10).