“What is your exit plan?” is a common question being asked of baby boomer business owners today. Advisers are beginning to realise that very few business owners have any idea of who will take over or buy their business when they decide to retire or if they are forced to sell their business due to illness or injury. Preparing your own plan will provide you with clarity about why you are in business and where you are headed. The 2014 Family Business Survey by PWC shows that 1.4 million family business owners are planning to retire over the next 10 years however only 8% of family businesses have robust succession plans in place. 38% of family businesses are planning to sell or float their business and 24% plan to pass it on to the next generation. (source: 2014 Family Business Survey by PWC ) One of the reasons business owners do not commence succession planning – despite being aware of its importance and discussions with advisers – is that selling a business you have created and helped to build is an emotional decision and not one based purely on numbers. As a business owner, you need to have a plan that covers your emotional as well as intellectual needs. These are some of the questions and feelings that you will need answers to : The process of considering these questions and working through your options in a strategic manner is called your Personal Succession Plan or Transition Plan. Creating your Personal Succession Plan will help you make a start on the business succession plan for your business. A personal succession plan prepares you intellectually and emotionally for succession. A Personal Succession Plan will help you work through the following questions:
- Where you do you see your business in five years;
- What legacy do you wish to leave;
- What is important about your business;
- What will you do to replace all the activities you enjoyed in business;
- What you and your partner do together;
- Who will you sell your business to;
- Will a family member take over the business;
- What do you enjoy about being in business and how will you fill that void;
- Will you stay on in the business and in what role; and
- What do you need to sell your business for to achieve your personal goals.
These questions will help you understand what is really important about your business to you, and form the foundation of your Personal Succession Plan. To put you in the best possible position and to make sure your succession plan is not based purely on numbers, it is important to make a start on your Personal Succession Plan and consider matters of the heart as well. If you would like us to review or help you prepare your Personal Succession Plan, please contact us on 0499976058. To find out if you are prepared for succession, please download What’s Next for Business Owners?
Follow My Footprints – Geoff
Disclaimers & Disclosures
Geoff Ivanac is Sub-Authorised Representative No. 000309751 of GPS Wealth Ltd (GPS) ABN 17 005 482 726 Australian Financial Services Licence (No 254 544) and can provide the following services financial planning, risk management, managed investments, superannuation and retirement planning, margin lending and self-managed superannuation funds.
The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your GPS Wealth Ltd (GPS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither GPS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.