Succession planning is crucial if you want to extract the maximum value from your business when you exit. For a small business, planning well ahead is even more vital! If you do not have a strategic approach to business succession planning – any value you have been able to build into your business may well retire when you do!
It is clear that a vast number of business owners are not prepared for their succession and will end up making decisions at the last minute. The likely outcome being a poor result for the business owner, as well as for the clients and staff.
Most business owners go into business with a plan to generate an income. But for many, it's even more important to build value with a view towards the future sale of the business itself.
More than half of all small business owners in Australia plan to use their business as the primary source of funding for their retirement. The average age of family business owners is 56 years – so for many, retirement is not too far off. For numerous business owners, the value locked-up within their business is their second largest asset behind the family home. In some cases, it may be even more valuable than the family home.
Most people will happily invest time, effort and money planning for the sale of their home but many neglect to do the same with their business. Investing in the development of a succession plan will be one of the most important financial decisions you ever make. It's a decision which will ensure that you realise the maximum value from your business upon your retirement.
Contact Succession Plus for assistance with developing your succession plan. And benefit from our expertise in business valuation, employee share ownership plans, capital gains tax, analysis, strategy and mentoring.