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Warrnambool Office
Telephone (03) 5561 0007
Fax (03) 5561 7640
Address Shop 5/124 Koroit Street
Email dpatterson@s4bg.com.au
Melbourne Office
Ph (03) 9017 6620
Fax (03) 9866 7779
Freecall 1300 301 411
Address Suite 2, Level 1
480 St Kilda Road,
Melbourne
Email pstafford@s4bg.com.au
Business Succession Planning
How and When you plan to leave your business is one of those thoughts that generally gets locked away in the back of your mind. Leaving your business will inevitably happen, whether due to retirement, selling the business or having to leave due to ill health. As a small business it’s vital you plan for that day!
A Succession Plan outlines who will take over the business and the maximum amount of value you will receive when you exit your business. If you do not have a strategic approach to business succession planning you may find yourself in the 20% of Australian businesses working beyond the normal retirement age of 65.
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. By doing this the most likely outcome will result in a poor result not only for the business owner, but also the clients and staff.
Most business owners go into business not only to earn an income, but also to build the value of the business and to make it saleable. More than 50% of small business owners in Australia plan to use the sale of their business as the primary source of funding for their retirement. For many small businesses retirement has begun to sneak up and no longer as far away as first thought. In fact the average age of a small business owner is 56!
For many owners, the value locked-up within their business is their second largest asset behind the family home, and in some cases it is even more valuable than the family home. While people know the value of their family home, they generally have know idea about the value of their business. People are happy to invest the time, effort and money planning for the sale of their home unfortunately they don’t do the same with their business.
A good succession plan enables a smooth transition with less likelihood of disruption to operations. By choosing to invest the time and effort to develop and plan your business exit well in advance you can maximise the value of your business when you retire to enable you to meet your future goals and needs.
At the end of the day, this it what it all about!