Small Business Succession Planning – do you have an exit strategy?

Succession Planning is an integral part of the business life cycle. As a small business owner, it is inevitable that you will eventually exit your business. Whether you decide to sell the business, pass it on to other family members, retire or leave due to personal circumstances, it is crucial that you are prepared for this event in order to make your exit as smooth and valuable as possible.

Perhaps you have built a successful business, and might be wondering what it will be worth one day when you are prepared to sell it? Maybe you are ready to move on to your next business venture, or even possibly retire?

Implementing a succession plan in the early stages of your business journey will allow you to plan your exit seamlessly, and in turn, maximise the value of your business.

Do you have an exit strategy in place?

Too often, small business owners don’t consider their exit strategy until it is too late. Most owners get caught up in the day to day operations of running the business, and don’t set aside enough time for planning what the future holds.

It is important to proactively consider this in the early stages of your business, as it will take years to execute a well thought-out exit strategy. Ideally, as a small business owner you want to exit your business at its peak; when profits are continually growing and the business processes are fine tuned. This will ensure you get the highest possible price in the event of a sale, and enable the new owners to take over the business without any disruptions.

Are you ready to sell your business?

Your business performance has been progressing over the last 3 to 5 years and everything is going really well. You might think it is the perfect time to sell your business. However, there are some other important points to consider before making your exit:

• New Ownership – Are you going to keep the business within your family group? Sell it to an external buyer? Hand it over to key staff already in the business?
• Business Valuation – Ensure that you engage a business valuer to get an expert business valuation done. This will give you a good indication on the market value of your business.
• Timeframe – When do you plan on exiting the business? How long will you remain in the business during the transition period?
• Key Personnel Risk – Do you have any key employees in the business? Will they remain in the business once you have left?
• Business Processes – Do you have all your business processes & procedures clearly documented and ready to be handed over to the new owner?

How can Lawrence help?

Succession Planning isn’t a straightforward process. It involves forward thinking strategies that will change from time to time depending on the current market conditions, how your business is performing and your own personal circumstances. Your Lawrence Advisor will be able to assist you through the process, to ensure you reach your goals, and achieve the best possible outcome upon exiting your business.

What are you waiting for? Pick up the phone and give your Lawrence Advisor a call today to discuss your business goals & objectives, and get your succession plan in place before it is too late!

–Jarrad Holt, Accountant

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Do you have an exit strategy?

At Lawrence, our diverse team of specialists will be able to assist you determining what could be the best exit strategy for you and your business.

Contact us today for an obligation-free chat about how this may suit your business.

This article is general information only. It does not give business, accounting, taxation, financial planning or other professional advice or service. It does not consider your specific situation, objectives or needs and if personal advice is required, a detailed analysis of your particular circumstances would need to be sought. Please see our Privacy and Disclaimers page for further information.