HONESTY and openness is vital in resolving tensions over succession planning, writes RICCARDA BURLEY
Passing on the family farm or business to the next generation should be a simple process, but so often it all ends in tears.
Accountant Stan Stavros, of SBM Stavros in Albury, said about half the people who attempted to put a succession plan in place failed due to a lack of communication or an inability to "let go".
"I think the secret to success is being up front with your kids, be open, be determined to sort out the issues and don't expect it all to happen overnight," Stan said.
One of the biggest mistakes people make is trying to plan too far ahead.
"You've got to think about how you would like to leave the business now and construct a plan accordingly to be regularly reviewed and updated," Stan said.
"Don't try to control things from the grave by using mechanisms such as protective trusts.
"At the end of the day, you've got to have faith in your kids and let go."
Nick Mensinga, of Howlong, in southern NSW, always knew that, one day, he would run a wholesale plant nursery.
From a toddler kicking around his parents' fledgling business, Nick has never wanted to do anything else except grow plants.
"Mum and Dad never pushed me," Nick said. "In fact, they encouraged me to work elsewhere".
Now aged 29, Nick took over his parents' wholesale nursery - which produces up to 40,000 pots a week under its nationally recognised Potted Colour brand - when he was 25.
Last year, the company recorded its best sales year yet.
Nick's father, Geert, a Dutch immigrant who started the nursery from a bare paddock in 1979, still works in the business, mostly on maintenance.
"The first year Nick took over, I nearly had a heart attack - he spent so much money," Geert said.
"But I kept telling myself not to interfere. He had to find out the hard way.
"But if he hadn't taken over the business, it would have gone backwards.
"I'd gotten tired and couldn't keep up the pace any more.
"If Nick didn't want it, I would have sold it."
Nick maintains a good accounting and legal team - which, combined with good communication between family members, is vital for the successful passing on of any business.
"Dad and I talk all the time - he's really the only one who understands what I'm going through," Nick said.
"I value his input and, even now, we discuss everything.
"There have never been any secrets - my sisters didn't want to be part of the business, but they've been provided for."
Geert believes parents who don't recognise their limitations are doing their businesses a disservice.
"You've got to recognise that when you get to a certain age you just can't continue the pace," Geert said.
"Things change, technology changes and, if you don't keep up, it all starts to go backwards.
"Parents can still be part of a business and enjoy what they've built up.
"I guess that's what I'll do until I become a bloody nuisance."
Stan, who has more than 35 years' experience in developing succession plans, said families should budget to spend about $25,000 over five years to implement a successful program.
"In most cases, we're talking about a multi-million dollar asset, so it's important there is good communication between all parties," Stan said.
"We want to see outcomes where the kids have a future, the parents are provided for and everyone has peace of mind."
