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Depending on your individual circumstances, your short and long term goals and countless other
factors, there are many reasons why it’s wise to develop a succession plan.
What is a succession plan?
Put simply, it is a blueprint for any business exit.
A well managed plan ensures the business owner gets their original money out and that they are adequately compensated for the years of hard work spent building the business.
What should a succession plan cover?
A good succession plan should cover such fundamentals as:
- when the business owner will exit the business
- who the business could be sold to
- whether the business owner has chosen to sell all of the business or sell down gradually
- tax and legal implications
Why you need a succession plan
Retirement might be only a couple of years away or decades away or you might intend to never retire; whichever way, you should still develop a solid plan for exiting your business if the desire or need should ever arise – in other words, what is your succession plan?
It’s anticipated over 400,000 small to medium businesses will change hands
over the next decade. Of these over 50% of business owners will use their business as their primary source of retirement funding.
Key steps to succession planning
Even if you are not yet considering selling your business, developing and implementing a succession plan takes considerable time and a great deal of expert advice because ultimately you will only get one bite of the cherry.
To get the ball rolling here is a check list of the key steps and considerations.
- Start planning now (it’s never too early)
- Seek professional advice (it’s too complex to do it yourself )
- Understand your personal and business goals (most people don’t)
- Understand the market and value of the business (you may think you understand, but do you really?)
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- Identify potential buyers and groom successors (even if you’re not currently thinking of selling)
- Identify areas of competitive advantage (you might be surprised)
- Perform a SWOT analysis on the business (a great way to reveal new business opportunities)
- Adopt business improvement strategies (you’d be surprised how many businesses don’t)
- Determine a funding strategy (get some expert advice)
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Always be ‘sale-ready’ (because you never know when a golden opportunity will come along)
Don't let time run away from you
It’s easy for the days, months and years to roll by, especially if you love what you are doing and passionate about your business, but succession planning is an important aspect of running any business.
If you haven’t given it any thought, put it on your list of things to do and call us on (02) 9922 7400.
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Jamieson has many years of experience in most of today’s well sought after industries.
These include:
- Business to business services
- Logistics and transport
- Customs broking/freight forwarding
- Insurance broking and financial planning
- Import and distribution
- Education and training
- Injury/rehabilitation management
Jamieson is aware of excellent business opportunities, in particular:
- Import and supply businesses are in high demand from buyers
- Insurance Brokers - Jamieson is currently conducting an acquisition search in NSW, Victoria and Queensland for a buyer.
- Customs Brokers / Freight Forwarders – More buyers than sellers in what is still very much a consolidating industry.
For more information, call (02) 9922 7400.
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