Getting your business and finances in the best possible order is a significant part of a succession plan. Unfortunately, a lot of business owners do not plan for an exit or succession and just hope for the best.
Succession planning protects your legacy, while also ensuring you leave the business you worked so hard to build in the best financial position possible. It also means you can leave the business knowing you did everything you could to help it – and the team you helped build – flourish into the future.
With our years of experience, we help business owners overcome common and complex challenges associated with business succession planning. By preparing for planned and unplanned exits, you can stress less about your personal future and your ultimate exit.
Succession Planning Services
- Family Business Succession
Transition your business to the next generation with no gaps in knowledge and a consistent vision with our family business succession planning services.
- Tax Planning and Minimisation
Planning ahead for your capital gains tax can help you effectively minimise your tax obligations to only what you must legally pay.
- Business Valuations
What is your business really worth? We will determine an estimate of your businesses market value and provide you with strategies to increase this value.
- Exit Structuring
We help you determine whether a sale (whether outright, partial, or vendor financed), merger or alternative exit structure is your best option.
- Exit Planning
Prepare for both a planned and unplanned exit from your business to minimise risk, maximise value, and streamline the process.
- Succession Planning
Being financially prepared for your retirement is one thing, being ready to transition your business to a new owner is another. Be ready for both with Sharp Accounting.
- Estate Planning
Get the legal documents you need to protect your legacy in place and ensure your business is protected if you fall ill or get injured.
- Strategic Planning
Gather the information and data you need to plan for the short and long term so you can accurately assess when it’s the right time to exit.
FAQs about Succession Planning
What does the Succession Planning Process Look Like for Businesses?
Coordination of the transition of your business to your successors can be an arduous process. However, with our years of experience, we can address the complex issues of business continuation, taking the stress off your shoulders.
Sharp Accounting’s Succession Planning services start with a financial review of your business before fleshing out a plan for your exit. To achieve this, we will consider:
- The current value of your business, based on the marketing conditions, financial statements, physical assets, and intangible assets.
- Your Business Valuation Gap – that is, the gap between the current value and the valuation you hope to attain before exiting.
- Retirement income and planning.
- The structure of your sale.
- Tax minimisation strategies available to you.
It is important that each succession plan that individual and business requirements are discussed and carefully considered. We understand that ‘stepping back’ is an extremely difficult step to take for business owners who have been heavily involved for many years. Our approach is to focus on the future and to help make the transition process as smooth as possible. This helps to ensure your plan allows for the hassle-free continuation of your business – and the steadfast protection of your legacy.
Why is Succession Planning Important for Businesses?
While it’s not always the most pleasant topic to consider, the reality is that one day you will inevitably need to leave your business. Whether it’s to retire, to move onto something else, a partnership dispute, or for health reasons.
A succession (or exit plan), outlines the things you will need to do to sell, close or transfer ownership of your share in a business. By planning for your eventual exit, you:
- Protect your legacy.
- Reduce the risk of conflict.
- Can plan ahead to increase the value of your business.
- Have time to train your team to manage when you leave.
- Ensure the transition process will run smoothly.
How Does Succession Planning Maximise the Value of Your Business?
Succession planning helps business owners maximise the business value for the exit event by giving them the time, space, and clarity required to address issues, generate additional value, and train essential team members.
When business owners fail to plan for their exit, they essentially only have the very short term to take steps to increase the value of their business. Generally, this means they won’t be able to increase the value by much – if at all. However, when succession planning has been considered long in advance, owners have time to make these critical, value-building changes.
We recommend business owners start planning at least three years before planning to exit, though starting to plan five or more years in advance of your exit is better.
Is Succession Planning Only For Retiring Business Owners?
If you’re planning to retire in the next five years, it’s definitely time to start engaging in succession planning. However, pre-retirement isn’t the only time to plan for your exit.
It can be helpful to consider succession planning at any point that you first write or whenever you update your Will and/or other estate planning documents. However, we would generally suggest managing your business so it can run without you as early as possible. Doing so involves hiring the right people, getting those people into the right roles, and generally engaging in business in a sustainable manner with appropriately managed risks. Essentially, this makes planning for the future part of your company culture, which comes with so many benefits, like employee engagement, strategic focus, and higher business valuation.
How does Family Succession Planning Work?
Succession planning is also essential for business owners who plan to transition the business to the next generation of their family. Family business succession planning ensures that there’s continuity in vision for the future of the business. Effective succession planning also promotes knowledge and information sharing, so the next generation of owners know what they need to succeed.