Planning for succession in a family business: Ladyman Financial Services

Basil Ladyman moved out of farming and into a career in financial services twenty years ago, specialising in insurance and then in financial planning.  He began working with Shirlaws about nine years ago when he was a joint Director at Concept Financial Group. He accredits Shirlaws for helping to significantly grow their business. 

In 2003 Basil and his business partner decided to dissolve Concept Financial Group and Basil formed Ladyman Financial Services. Ladyman Financial Services is a small financial planning business that offers expert and professional advice in three key areas: insurance, superannuation and retirement planning, with a personal service. Ladyman Financial Services is based in Subiaco, Perth. 

Shirlaws has been working with Ladyman Financial Services to set up structures and systems to underpin their business strategy from day one. 

Shirlaws' methodology categorises jobs into three types of functions: strategic, operational and administrative and then assesses which members of the team have the right skills to take on the functions and responsibilities for delivering in each area. 

Shirlaws has a colour coding for administrative, operational and strategic activities. Red activities are non-revenue generating and include HR, compliance, administration and IT. Blue activities include all revenue generating functions and are customer related. These include sales, marketing, production and customer service. Black activities relate to strategy and business growth and include joint ventures, mergers and business positioning.

Building a family business and planning for succession

Basil's son Morgan, also a qualified financial planner, had joined Ladyman Financial Planning and it was agreed Morgan would eventually take over the business from Basil. Succession planning became and continues to be a key element of Shirlaws' advisory service to Ladyman.

Having worked in the farming industry, Basil was aware of the issues around succession planning, noting that problems often stem from allowing a business to evolve to the next generation, rather than putting a proper plan and structure in place.

The first hurdle for Basil was gaining buy-in from his family. Succession planning within family businesses can be emotional and difficult and needs to be done as transparently as possible.

Shirlaws advised Basil to put "everything on the table" and encouraged him to keep the lines of communication open during family discussions. Basil wanted to take Morgan's two sisters into consideration and make it clear that Morgan was buying into the business on a commercial basis and not as a foregone "birthright".

Since the agreement of the "succession", Ladyman Financial Services has been able to put a succession plan and timetable into place with Shirlaw's assistance.

Because of the small size of the practice (there are currently three full-time employees), Basil recognised the succession planning process would need to be evolutionary and natural to some extent, supported by a plan. Basil, Morgan and Shirlaws meet every six months to review progress and determine next steps for the next six months. This usually results in Morgan receiving a larger slice of the business to manage every year.  

Outcomes

Basil feels comfortable with the succession plan and is looking forward to "easing off" slowly.

Basil says: "Knowing the business is under control, growing and will be in safe hands once I'm no longer part of it is a fantastic feeling. In the meantime my level of comfort with the business has improved so much I'm already able to take a day off every week and am looking forward to easing off over time."

Chris Dionne, Founding Partner and Global Director, Shirlaws said: "Succession planning is going to be a huge issue and challenge for business owners over the next five to ten years, partly because of the number of Baby Boomers looking to go into retirement and the limited succession options available.

"Business owners need to start reviewing their options now, looking at how they can "let go" and find and develop the next tier of management and owners, as Basil Ladyman has done. Acting early gives great peace of mind."

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