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Chapter 1:
The role advisers play in the family business journey.
One of the first lessons every successful business owner learns is that they can’t do it all alone. There isn’t enough hours in the day, skills in your toolbox, or space in your head to handle everything yourself – especially if you want your business to grow.
The people you then choose to work alongside you have a big impact on how your business performs. Whether it’s the administrator appointed to run the office, the salespeople brought in to open doors and close deals, or the bookkeeper charged with managing tax compliance, all play their own unique and important role in keeping the business going.
In a family business, these engagements have added complexity (and rewards) in that the administrator may be your daughter, the salesperson your son, and the bookkeeper your spouse. At 10am you could be debating in the office, and at 7pm sitting down to a family dinner. The dynamics are different.
This makes the role of external advisers a very important one. Every business owner benefits from being able to leverage clear commercial insight from professionals. In a family business though, advisers can also act as an impartial sounding board and mediator, free from emotion, when it’s needed most.
The right advisers at the right time
The earlier and more thoughtfully you involve the right advisers, the greater their potential to positively shape your family business journey. Of course, you can find an adviser for just about anything your business could ever need. So how do you separate the essentials from the nice-to-haves to get the best return without overspending?
Essentially, this depends on where you are in your business journey.
One of the most underestimated yet pivotal times requiring
expert advice is before you set up your family business.
Why?
Because failing to structure your business correctly from the outset can have serious repercussions later on. This includes:
- how much tax you end up paying
- how easy it is to sell or pass on the business
- how well your assets are protected and liabilities managed
- how disputes are handled through agreements
Structure relates to the legal and financial framework of your business. For instance – will you operate as a sole trader or a company? Would a trust be beneficial? Is this a partnership or are there multiple shareholders? What role does each person play?
Sometimes the best solution is a combination of structures,
depending on your goals and circumstances.
However, backtracking from poor structuring decisions is complicated and costly.
If, for example, you achieve unexpected success in one structure and decide to switch to a more appropriate structure, you may trigger an unintended consequence – such as capital gains tax or stamp duty, which could be very detrimental to your business.
To have one structure that is a solution for all of your short, medium and long term plans is rare. So it is important to always consider the various possibilities and circumstances that may force a change and ensure that some form of flexibility is maintained.
Who you need on your side
A skilled tax adviser.
This may or may not be your business adviser or management accountant, but the adviser must be an expert in business structuring and the tax implications of structuring decisions.
They may also need to work alongside a skilled legal practitioner who can assist with the establishment documents such as engagement letters, terms and conditions, and shareholder or partner agreements, among others.
Here is a quick breakdown of business events where specialist advisers are well worth the investment…
Entering new markets
You are dealing with a new region or industry that introduces unfamiliar regulatory, tax, and competitive environments
Considering a joint venture
You are partnering with another business and navigating shared decision making, risk, and ownership complexities
Landing a major contract
The business has won significant new work but delivering it could strain existing systems or cash flow.
Applying for major funding or finance
You want to secure a bank loan, private capital, or government grant and need to be investment ready.
Buying new equipment or a premises
You are making large capital investments and need to consider funding, asset protection, depreciation, and return on investment.
Adopting new technology
Greater efficiency through digital transformation is imperative, and you need support to select and implement fit-for-purpose systems.
Expanding the ownership base
You are introducing new shareholders or employee equity schemes and need guidance on structural, tax, and control issues.
Setting up a self-managed superfund
You want to establish an SMSF (with or without family members) to acquire a business premises or have more control over investments.
Dealing with family conflict
Family members are struggling to align on important business decisions, and you need an objective sounding board and mediator.
Implementing better governance
You aren’t quite ready to establish a board, but would benefit from regular, semi-formal business meetings with skilled advisers who can offer independent perspectives and commercial guidance.
Establishing and managing a family office
The family’s financial affairs have become too complex and there’s a need for dedicated oversight across investments, tax, philanthropy, and planning.
Who you need on your side
An adviser with the skills, capability, and capacity to support you through the specific event your family business is facing.
Planning for the future
As your business grows, so too do your wealth and assets.
You now have something to lose, as well as something to pass on.
There has never a better time than the present to get your estate plan in place or, if it is in place, reviewed and challenged.
This means engaging with your trusted advisers, who can work with you to develop a:
- Memorandum of Wishes
- Last Will and Testament
- Enduring Power of Attorney and/or Guardianship
They can also assist with insurance planning, shareholder agreements, and other essential documentation that clearly details your wishes in the event of injury, illness, separation, divorce, or death.
We cover estate planning in more detail in Part 5.
RSM provides specialised support in all of these family business matters and more
- Business advisory
- Tax consulting
- Business structuring
- Tax compliance
- Digital advisory
- Virtual CFO
- Succession planning
- Estate planning
- Retirement planning
- Wealth management
- Family office
- Insurance advisory
- ESG R&D tax
- International tax
- Internal audit
- Government grants
- IPO support services
If you’re handing over to a family member, hopefully:
- they’ve had the right preparation and experience for the role
- the broader family is clear on what the plan involves
- there are solid processes in place to support continuity and keep
- the business running smoothly
The same applies if the plan is to sell and exit the business.
All of this pre-planning serves to remove much of the emotion and stress, so you can step out and into retirement with confidence and ease.
Part of this pre-planning should also include the relationships you have cultivated with trusted advisers who are on board to guide the next captain of the ship.
As an example, RSM has a number of clients whose businesses are now into their third generation. Knowing where the business has been, how it has evolved, and where it’s intended to go is priceless for the original owners and their successors.
You need advisers who understand the dynamics of family business. Advisers who appreciate how family decisions get made, how emotions can shift things, and what legacy really means when it’s tied up in both money and relationships. It doesn’t have to be the biggest name or the top-tier firm.
You’re better off with someone who fits. Someone who sees the full picture, asks the right questions, and gets how your business and family operate day-to-day. Someone who’s just as comfortable talking tax implications as they are working through a difficult conversation between siblings.
Start those relationships early. It’s much harder to find the right people when you’re already dealing with change.
The best advisers are the ones who’ve seen you through the quieter times and know what matters most when the pressure is on.
Who you need on your side
An adviser who understands the realities of family business succession planning and will be there before, during, and after the process.
Choose advisers who understand family business You don’t want advisers who only tell you what you want to hear. The most valuable advice is that which:
- challenges your thinking without creating division.
- brings perspective grounded in experience
- helps you make decisions that hold up in family and business contexts
- supports your goals without losing sight of the bigger picture
Have a follow up question for our team?
Get in touch
Have a follow up question for our team?
Get in touch
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