What is business succession planning?
19 Apr 2018
- Business Succession
According to the Australian Family and Private Business Survey 2013 (RMIT University) the average age of small business owners in Australia is 58. It is estimated that over 50,000 small business owners will be looking to exit each year. Unfortunately, over 50% of these business owners will exit due to death, illness, divorce, dispute, financial distress, bankruptcy or other unforeseen events. Emily Shoemark and Caitlin Meers of Snedden Hall & Gallop Lawyers have accredited Succession Plus advisers, guiding Canberra business owners. Find out why they advise that if you are one of the small to medium business owners that intend to retire off the sale of your business, business succession planning is your precious partner now.
Many small and medium business owners intend to just hand over the family enterprise to their kids. In reality, it’s much, much more than that. Business succession and exit planning are about combining the business, financial and personal goals of business owners to design and implement a strategic exit. It involves building a plan for the future of the enterprise, a personal financial plan for both the owners and their successors if they are family members, and also addressing the issue of your personal goals. We need to address the very important issues of how and who will run the business into the future.
Business succession and exit planning is a strategic approach to assessing the most appropriate (and valuable) exit options available to the business owner and designing a strategic succession plan to achieve the preferred outcome.
A successful succession plan should consider 3 important factors:
- Exit readiness and value maximisation for the business;
- Personal and family wealth management to fund retirement and provide for future generations;
- Life after business – preparing the owner (and often their family) for what might be several years of retirement.
Focus on these three critical aspects should ensure we’re able to maximise the value of business, achieve a successful exit and guarantee retirement funding and peace of mind for the owner.
The horrible truth for most small business owners is that if you don’t plan, you get a poor price. A good succession plan is a win for everyone – you get the best price, the buyer gets a good business and your customers and staff are looked after.
How can Snedden Hall & Gallop Lawyers help you?
Snedden Hall & Gallop Lawyers is an accredited Succession Plus adviser and the local partner in Canberra. We will assist you with proven and multi-award winning* Succession Plus planning strategies to make the most of your business.
* The Succession Plus Employee Share Ownership Plan has won the Australia-wide award for the Employee Share Ownership Plan of the Year twice in four years.