How to Make a Family Business Succession Plan

Wondering how to make a family business succession plan that actually works? Start by defining your goals; who will take over, when the transition will happen, and how ownership will be structured. Then, involve your family early, clearly document responsibilities and timelines, and gradually step your chosen successor into leadership.

Once that’s underway, get expert advice. A business advisor can help structure the handover legally and financially, minimising tax and ensuring a smooth transition.

At M2 Corporate, we’ve guided countless family-owned businesses through smooth and successful successions. With decades of experience and industry recognition—including being finalists in the Australian Accounting Awards and winners of multiple Accountants Daily accolades—we bring a depth of knowledge that helps avoid common pitfalls in your succession planning and secure long-term success.

Quick Summary

• Succession planning ensures your family business continues smoothly after leadership changes.
• It protects your legacy, reduces tax implications, and helps avoid family disputes.
• Key steps include identifying successors, documenting your plan, and seeking professional advice.
• With expert guidance and early planning, your transition can strengthen your business and preserve your family values.

What is Succession Planning in Business?

Succession planning in business is the process of ensuring your organisation has the leadership and ownership continuity it needs to thrive into the future. For family businesses, that usually means preparing the next generation to take over while preserving both business performance and family relationships.

Effective succession planning includes choosing who will take on leadership roles, how ownership will be handed over, and setting up safeguards to maintain smooth operations throughout the transition. It also clarifies how the current owners will remain involved, if at all. This could be through advisory roles, board positions, or a phased retirement approach.

Whether your plan involves passing the baton to your children or selling the business externally, this kind of planning helps reduce risk, protect your wealth, and maintain the trust of customers and staff.

How Succession Planning Works

Succession planning isn’t a one-off task you check off a list. It’s a deliberate, evolving process that requires communication, structure, and accountability. Here’s how it usually unfolds:

1. Assess your current position – Review your business’s current health, future goals, and where leadership gaps might emerge.
2. Identify suitable successors – This might be a family member, key employee, or an external candidate, depending on the future direction of the business.
3. Develop their skills and experience – Provide training, mentoring, and real-world leadership opportunities so they’re ready when the time comes.
4. Create a structured handover timeline – Map out key dates, transitional roles, and how authority will gradually shift.
5. Formalise your agreements – Work with accountants and legal advisors to create binding documents that outline roles, responsibilities, share ownership, and any ongoing financial interests.

In well-managed transitions, succession planning reduces the risk of uncertainty, empowers your team, and supports long-term value retention for the business.

How to Create a Succession Plan

If you’re thinking about succession planning, the best time to start is now. Creating a robust plan early on avoids confusion later. Here’s how to make a family business succession plan that works:

1. Start well before you need it – Ideally, succession planning begins five to ten years before your desired exit. This gives time for preparation, adjustment, and training.
2. Open up the conversation with family – Clear communication is essential to avoid assumptions, conflict, or resentment. Engage all relevant parties from the start.
3. Set specific goals – Define what success looks like: Is the aim to retain family ownership? Maximise sale value? Minimise tax liabilities?
4. Nominate the right successors – Choose based on capability, vision, and commitment—not just family ties or expectations.
5. Document everything – Your plan should cover timelines, responsibilities, ownership structures, and what happens if someone steps away unexpectedly.
6. Keep reviewing – As your business and family evolve, your plan should be reviewed regularly to stay aligned with your goals.
7. Use professional support – Advisors like M2 Corporate can guide you through the tax, legal, and strategic side of succession. We’ll help you turn intention into action.

Why Succession Planning is Important

Many business owners delay succession planning because it feels too far off—or too emotional. But leaving it too late can create confusion, damage relationships, and expose the business to risk. A thoughtful, well-documented succession plan offers major benefits:

• Continuity and stability – Operations continue without interruption, giving employees and customers confidence in the future.
• Family harmony – Transparent communication and formal agreements reduce the likelihood of disputes among family members.
• Financial protection – Good planning helps minimise tax liabilities and ensures a smoother transfer of assets.
• Staff retention – When employees understand the future direction and leadership of the company, they’re more likely to stay engaged.
• A lasting legacy – Succession is your chance to embed the values and direction you’ve shaped into the business for years to come.

M2 Corporate understands that this process is as much about people as it is about numbers. We specialise in helping family businesses strike the right balance between emotion and economics—guiding you through every step.

Partner With M2 Corporate

Planning for the future of your family business doesn’t have to be stressful. Our business advisors in Perth will help you create a plan that gives you peace of mind today and sets your business up for success tomorrow. We’ll walk with you through the strategy, paperwork, and family discussions—ensuring nothing is missed.

Our team has been recognised with multiple industry awards, including Accountants Daily’s 30 Under 30 and finalist positions at the Australian Accounting Awards. We’re also proud Xero Gold Partners, offering leading digital tools alongside trusted advice.

• Learn more about M2 Corporate
• Meet Mace Turco, our Managing Director
• Read client testimonials from businesses we’ve helped transition successfully

Ready to secure the future of your family business? Get in touch today.