Future-proofing your family business

By Sabrina Cortez

Too often many businesses fall into the trap of believing that experience and extensive accreditation makes a good successor. Whilst experience is valuable in managerial roles, an effective people manager – at different levels throughout the business – combined with the right mix of industry skills is a sound way to future-proof your business.

By developing a good succession plan, you can mitigate risks in the long-term and allow for a smooth transition for you to take your business to the next level.

While there are no silver bullets to finding the right person, the mentoring and learning process will play a crucial role. Marianne Becker and her son, Daniel D’Mello have proved why a mother-son duo is their winning formula in a people-dependent business.

She likes to work with people she can trust and someone who shares the same values towards client servicing. He is a seasoned financial planner with the thirst to take on new clients.

Marianne, who founded Key Finance in 2001, and Daniel admit that maintaining a ‘mother and son’ business has its challenges. By identifying their future roadblocks and engaging with a mentor for Daniel, Key Finance has developed its own strategic direction for success and new client management.

“A key benefit of professional mentoring and training is that it allows fresh eyes and insight into my business that you don’t usually see when working on your own,” says Marianne.

“By having someone else on board, it streamlined my business given that I had someone to throw ideas to and someone else to answer to,” she adds.

“Many people asked why I’d invest so much money into his mentoring, but I think it is money well-spent,” says Marianne.

Whether you decide to sell your business, retire or leave the industry, it’s important for you to plan ahead for that day. Engaging a mentor for your employees can deliver real value for your business. It creates and supports conversations about careers and personal ambition that are difficult to encompass elsewhere.

Understandably, the learning process will be tough for some. Daniel finds his mentoring experience a crucial factor to adopting new business processes and driving his ambition to one day take the helm of Key Finance.

“Mentoring teaches you more than just writing a loan,” says Daniel. “Mentoring taught me how to run a successful business.”

“I bought a lot of this information back to Key Finance and to Marianne. I want to credit her – she had embraced all the changes I wanted to make even though some of it may be confronting.”

People operating in a family business will tend to have different ideas and approaches to deliver client satisfaction and day-to-day plans. The ability to sense your clients’ needs and personal situation becomes second-nature as both Marianne and Daniel agree.

Daniel says their high level of respect for each other keeps them on track.

You have to realise there is a bigger picture and there are a lot of different ways to do the same thing,” he says. “You don’t have to embrace all of the changes as it may be difficult for some people.”

“Measured change can be the best thing for you. It is not about going from one extreme thing to the next but rather to make a few tweaks,” he says. “You have to stay up-to-date with new changes – ours is a dynamic industry and there is much compliance that we will need to abide by.”

Most people find potential talent either within their business or their family. Your professional network can also provide you with links to potential talent, but there are always other ways to run a business should you choose not to have an exit strategy.

“If someone chooses not to have a successor, there are different ways to running a business,” says Marianne. “Many people, especially around my age, do not have relationships with another broker to help them run their business.”

“This may not be quite the right thing for their clients, but it is their choice.”

The family business model has worked well in the mortgage finance broking industry for many years. The challenge for family businesses, however, is the ability to create the arrangements to deliver generational longevity while also retaining market relevance across a broad spectrum of clients at different stages of their lives.

“It comes back to getting a [business] partner you can trust, because, that in itself will help mitigate some risks,” says Marianne. “Make sure the person you take on has the same values as you, gets to know the business and is someone who is open to good training.”

“I think one of the key things for someone to look at for a succession plan – is themselves, they need to be open to change,” Daniel suggests.

Whether the business handles succession in-house or finds new talent, the results are better when all stakeholders are engaged from the outset in envisioning and shaping the business’ future.

Find someone you can trust: Make sure the potential successor you wish to employ will have long-term career objectives that align with you and your business values.

Diversify your decision making process: Foster and offer diversity initiatives to expand understanding and encourage collaboration across the different demographics of your employees and your clients.

Seek other opportunities to share ownership: Transitioning ownership or sharing clients is fundamental to your business’ long-term survival. Find other people who you could represent who want to contribute to your success.

Make sure your succession plan is achievable: Set a realistic timetable and measurable milestones along the way and stick to them.

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