What happens if you are hit by the No.83 bus?
Andrew Hague, Partner at WR Partners
By Andrew Hague, Partner
It takes guts to start a business. It also takes a strategic entrepreneurial mindset to succeed.
Business owners are no strangers to weighing risk and navigating uncertainty, but the current climate has highlighted everything in business owner’s minds. Many business owners face the uncomfortable position of having to remap carefully thought-out succession plans and exit strategies and to consider selling their business before they’re ready and, possibly, for less than it's worth.
It has been highlighted to me recently with the number of business owners talking to me about their plans to exit. Covid19 has accelerated peoples plans.
Transition planning may be a better option
The WRP Advisory team can work with you to ensure you are best placed for a managed exit from your business.
There are five different ways to sell:
Close the business down and sell the assets
Sell to a family member
Sell to an employee
A straight sale to an outside party
Gradual buy-out
Preparing for sale - what’s important
Get your house in order - Ensure you have systems and processes in place so the business isn’t reliant on you, but can run as a standalone entity. I’ll discuss this in my next article.
Work out what your want your legacy to be – What will be important to you upon your exit?
Maximise your profit - Make sure that you are not taking decisions to minimise your tax liability – because what you’re trying to do is create a profitable business.
Don’t put off your succession plan - even if you are not ready to sell
A succession strategy is a plan for wrapping up your involvement in a business. For most people, that means readying the business for a change of owner. Executing a well thought-out exit strategy can increase your sale price while ensuring the business continues to thrive after you’ve left. This can also be called succession planning.
It’s a good idea to think about this long before you need to sell so that you maximise the value of the business and achieve a better outcome. It's also worth remembering that retirement doesn’t need to be doing nothing. If your business can run as an asset without your involvement, you don’t have to sell it completely, so not selling down 100% of the business is a viable option.
Talk to us today about your succession plan
If you don’t already have a succession plan in place, we can help so that you have options when you need them.
