Don't waste your hard work!
Last week we had the pleasure of catching up with Craig West, CEO of Succession Plus, Australia's largest business succession and exit planning firm who provide mentoring, advice and strategy for clients looking to prepare their business for a successful exit. I was interested in finding out more about what the term succession planning means, and why we should all have a succession plan as allied health business owners
This is not the case! A succession plan outlines what will happen to your business when you leave, whether you are selling it to move onto new horizons, retiring, or leaving your business for other reasons. Craig shared the following information to help further our understanding:
Maximizing the value of your business and achieving a successful exit should be the ultimate test for any business owner – but in order to avoid failing at the final hurdle, you need to allocate sufficient time, energy and resources to designing and implementing a strategic business succession and exit plan.
We all end up moving on from our business at some point - exit and succession planning is all about maintaining control over how and when you leave and on what terms.
Succession and exit planning mean you can:
- Minimise your tax (Capital Gains Tax is one of the most important considerations in your exit plan)
- Secure your future income
- Provide a smooth transition for your team
For those that feel they may have left it too late to plan, think of it like trying to sell your house quickly. There are simple things you can do to increase the value of your house which doesn't require you to spend a lot of time or money, for example, cleaning out clutter, cleaning up the yard, or a quick coat of paint. Likewise, there are some things you can do to improve the value of your business in the short term. They won't have the same impact as a strategic succession plan, but they will improve the buyer's perception of your business.
There are many ways to exit and it can be useful to have someone guide you as to which will deliver the best result. Options vary in terms of complexity and payoff and include:
- Management buy-out
- Employee share scheme
- Selling to competitors, suppliers, customers
Developing an exit or succession plan means you have every aspect of your business mapped out as to how it will get you to your desired exit outcome. It will not only enable you to attract a higher sale price, it will also mean you can
Craig West, B.Bus (Mgmt), M.Bus (Acct/Fin), M.Tax Law, CPA, CEPA