Business succession planning – the questions you need to ask
- Exiting a Business
- Succession Planning
A business is one of the single largest investments we make in a lifetime. Over the years and with many sacrifices made, owners see their vision grow into a strong, reputable, and for many, profitable business.
With growth and success in any business there comes a time to begin thinking about it’s transition – the point where a handover, relinquishing of the reins or even a sale needs to be considered. This can be difficult for any owner.
Many small to medium sized businesses are family owned and run, so decisions within the succession plan are made based on what is best for the business, and what is best for securing the financial future of the family.
Top 8 questions to kick start your succession planning
The key to achieving the perfect succession plan for your business is to identify your objectives, beneficiaries and long term financial goals as early as possible – and to do this, ask yourself these questions:
- What are you selling?
- Who are you selling, or transferring business ownership to?
- Are they aware of this?
- Are they on board with this decision?
- Do you have an employee(s) ready to take on a senior role in the business?
- Does this succession plan impact current and future hiring and firing of team members?
- What is the actual value of your business?
- Have you allowed for tax and additional expenses in this final amount?
- Is this amount enough to secure your financial future?
Discuss all outcomes with those directly involved in the succession plan. If your plan is to maintain business control in the family, be sure those family members agree with this plan.
Only looking to relinquish part of the business ownership? Consider how this works from an operational and financial view, and ensure all parties are on board with this vision.
Do you have the employee(s) necessary to perform more of a senior management role in the business and do they require additional training? The outcomes of these questions are certain to impact future staffing – as an owner steps back, there must be someone to “step up.”
If a succession strategy is purely a financial one, setting yourself up strongly for the business sale process is an important part of the execution plan.
Take the stress out of the sale
Going into a transaction with a solid succession plan in place is key to easing the stress throughout the sales process of your business. Having a clear understanding of financial goals and operational expectations will inevitably assist in smoothness of the transaction as it rolls out.
How we can help
Elevate Accounting can assist business owners with:
- Trade Sale
- Management Buy-in / Buy-out
- Family Succession
Succession planning assistance including:
- Formulating a succession plan
- Estate planning
- Tax Reduction on sale
Find out more on succession planning HERE
Book your obligation free chat with the team at Elevate Accounting HERE.