Story by: Tom Lewis

There’s a time in every business when the owner needs to make the decision to pull back. Sometimes the reason for this decision is anticipated, and can be seen coming from miles away. Sometimes it’s waiting around the corner, and it’s carrying a brick.

Whatever the scenario, when it comes to moving on from your business, there are two basic choices: wind up, or pass it on to someone else.

If the plan is to pass it on to someone else, then – for small businesses such as those often found in the seafood sector – there is often a choice to be made between selling to a third party or keeping the business in the family. This article is the first of several that will examine some of the issues to be considered when the choice has been made to keep the business in the family. The transfer of a family business from one member to another is often called “succession planning”, and it isn’t easy. It needs careful thought, planning and commitment. Like any plan, the earlier you start your succession planning process the more options you’ll have. Many people start their succession planning when someone has to leave the business – for example, due to a physical inability to keep doing what they’ve always done. That’s not the best option. What you really want is time to start the plan when someone new, the next generation possibly, is looking at joining the business.

The issues that can come up during a family-based succession planning process can be complex, deeply felt and not always totally rational. And they tend to be similar – whether we’re discussing the succession of a business comprising a single fishing vessel, multiple vessels, an aquaculture venture, or an integrated seafood business.

The key to a successful succession plan is clear, open communication. If this culture is not the norm in a family, then maybe this should be the first objective of the actual succession planning process. Let’s face it, handing over a seafood or fishing business can be an emotional time – especially as it involves major change in the lives of everyone involved, and it means money. A succession plan needs to meet everyone’s needs and be able to withstand the scrutiny it’ll get over time. To get to this point, it is vital that everyone involved is able to talk freely and openly about all aspects of the plan. There may be some members of the family not involved directly in the change over. Even so, their involvement is crucial to a successful transition.

Most people who have been involved in the succession planning process would strongly recommend using third party, professional assistance to help smooth the process – for example:

• A Facilitator, who will help the family and their advisors work through the process in a structured way. Importantly, an effective facilitator will ensure everyone is given the chance to be heard and to provide constructive input into the process
• An Accountant, who will help define your current position and the best way to structure the change, taking relevant financial laws into account
• A Solicitor, who will advise on the current and future legal implications of your various options
• A Financial Planner, who will help work out the best strategies for setting up investments and superannuation.

Take care with your planning, take time, and be prepared to listen, be flexible and to make compromises as you go. Remember your goals and aspirations, and work towards them.

TSIC is here to help you with your succession planning process, and encourages anyone looking for assistance in this area, or willing to share a story to help others in the industry, to contact Mary Brewer, on (03) 6224-2332.

Tom Lewis manages the Seafood and Food Manufacturing Programs for Rural Development Services and can be contacted on 03 6231 9033 email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it