Involve the family with Business Planning- Old Mutual

A family-business should be discussed formally with a financial adviser and not casually around the braai. It remains a professional business and needs to be managed as such, especially when it involves succession planning and the continuation of the business.


The importance of family-businesses is widely recognised in the economy. According to the latest statistics of the Institute of Family-Business (IFB), two-thirds of all businesses in the world are family businesses. It is responsible for 70–90% of the world’s GDP and creates between 50-80% of the jobs in the world.


The U.N. General Assembly recognised that family-businesses contributed to the sustainable development of local communities and has officially declared 2019 – 2028 the Decade of Family Farming.

One of the critical goals of a family business is thriving in succession planning. According to the Association of Family-Businesses in Southern Africa (FABASA), only 14% of family-owned businesses are successful when it comes to succession planning whereby the business is passed on to the third-generation.

A family-business will have the same issues that any other business has. Still, there are other factors in addition to the general business issues that affect the sustainability of a family business:

  • Management systems need to be in place so that decisions are not subject to emotional decision-making
  • Succession Planning needs to be in place that ensures the business contingency plan
  • An agri-business will have to consider insurance against natural disasters such as drought

 Succession planning should consider the following:

  • Succession planning is a critical part of business planning to ensure the permanency of the business
  • The key person that will succeed management need to be identified early on to undergo training to ensure a smooth transition of management
  • Provision should be made for early death, disability and retirement of the existing owner
  • The business plan should be revised annually to ensure that the current strategy is aligned to the long-term goals of the business owner and that the plan is up to date with the changing tax legislation and the economic environment. As such, the will, trusts, the estate plan and the retirement plan need to be revised annually.

 Involve the family:

Too many farmers are still dependent on casual financial discussions when they need to do professional financial planning for their business. It is a family business, so involve the family. Create a blueprint for the family-business, include your spouse and talk about the contingency plan of the business.

No one plans to fail, but may fail to plan. The lack of planning can destroy a business that took decades and generations to build. Often the reasons for failure is that there weren’t appropriate solutions for what seems common problems such as insufficient liquidity in the estate to cover all the expenses or to cover the estate duty or capital gains tax.

If you don’t get your finances right, you can’t get your future right. And because this is so crucial, financial decisions cannot be taken lightly. 

Crafting a financial plan requires a partnership between you and your financial adviser, and its success depends wholly on your commitment. The advice process is structured to ensure that your needs are analysed and understood, shortfalls are identified, and recommendations are made to address the shortcomings that are in your best interest. A financial plan also creates the platform to review progress towards goals on an ongoing basis as your circumstances change and will ensure peace of mind in uncertain times for your loved ones.

In most cases, financial advisers are supported by legal advisers who will ensure that you are provided with the most appropriate plan and solutions.

What qualities do you need to look out for in a good financial adviser?

  • Consult a financial adviser who complies with the Financial Advisory and Intermediary Services Act. A financial adviser is accredited by the financial services provider to advise on specific solutions. Ensure that the financial adviser provides you with proof of a list of products they are authorised and accredited to advise on.
  • The adviser should have a good support network from legal advisers to fiduciary services and appropriate solutions from reputable financial services providers that have a proven track record and investment expertise.
  • Last but not least is that you have a relationship with your adviser and that you trust them. Ask for references from existing customers to provide you with peace of mind.


Developing a financial plan and accepting the counsel of a financial adviser as coach and partner is a lifetime commitment to making dreams a reality. With a myriad of solutions available, we encourage you to seek the advice of an accredited financial adviser who will assist in developing a business plan. The financial plan provides you with the framework to maintain control over your finances and achieve financial freedom and security for you and your family.


While we cannot predict the future, we can sleep easier knowing that we are financially prepared. To speak to an Old Mutual financial adviser get financial peace-of-mind, Click Here. 

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