Farewell Crikey

The death of Queensland conservation icon Steve Irwin was a shock to all, none more so than his family, including his extended 'family' at Australia Zoo.

A sudden death such as Irwin's highlights the vital importance of succession planning in family businesses.

According to Warwick Michalk, director of Centre for Business Success, one of Business Communications Management's business alliance partners, very few family businesses are prepared to cope with the loss of its leader whether through retirement or the tragedy of a sudden death.

"A survey conducted by CPA Australia in 2004 discovered that only 38% of family business owners had a succession plan yet about the same number, 40%, believed the business couldn't survive without their input," he said.

Yet the majority of people, 71%, believed that someone could take over the business if needed.

"That demonstrates a huge disconnect between the state of preparedness of the business and the desire of the business owner," said Warwick.

"One might be fortunate and pick the date they plan to withdraw from the business. On the other hand, events may overtake you."

Through effective planning and management, Australia Zoo and Steve Irwin's other enterprises will be a lasting legacy, said Warwick.

Warwick has six tips to ensure that family-owned businesses thrive long after the business founder:

1. If you work in the business remember to differentiate the role between yourself as an employee and yourself as an investor

2. Treat your business as an investment and develop strategies to ensure that is providing an adequate return on investment

3. Document all procedures

4. Ensure there is a healthy profit - it's far more important than turnover

5. Develop effective delegation strategies so everyday decisions are pushed down as far as possible in the chain of command

6. Employ people better then yourself and train your team to manage the business in your absence