Succession planning

Congratulations on having built a successful business. But how will you fully release the value of that business for the benefit of your family?

Succession planning sounds like the sort of thing you do when you are approaching 60 but in reality you should be thinking about this much earlier. It is as much about risk management as it is about ultimate retirement!

Succession planning is really about making yourself dispensable in your business or at the very least, reducing the reliance on you. If the future of your business is totally dependent on you, then its value may well be lost or substantially diminished if you were to suffer a long-term illness, become disabled or die. Effective succession planning must therefore include considering the unexpected as well as planned events.

Protect and release

Succession planning is about ensuring that the value of your business is protected and is capable of being released at some point. It will consider issues such as:

bulletDependence on particular individuals (not just the business owner)
bulletDocumented systems and procedures
bulletThe quality of your customers, contracts and restraints on key employees
bulletWhat steps should be taken to prepare your business for sale?
bulletHow are you developing your team?
bulletCan the business run without you now?
bulletHow can you optimise the value of your business?
bulletWho are potential purchasers of the business?
bulletWhat role does insurance play in protecting your family?
bulletWhat would a due diligence investigation of your business reveal?
bulletDo you need to sell to achieve flexibility as you grow old or can the business be self sustaining?

Our view is that the best succession strategy is to ensure that the business is addressing all of the above issues now, not just when a potential purchaser appears or when you reach the point where you want to sell.

One of the things that we have found over the years is that cashing out the value of the business may not be the best financial decision and that with fewer and more discerning purchasers in the market, more and more businesses will continue with managers in control and owners being more passively involved.

We can assist in charting the right succession course for your business. It is never too soon to start this process.

Helen Boucher

New to Saward Dawson? Book a free 30 minute consultation

We happily spend 30 minutes without charge with new contacts to explore relevant issues and outline how we can assist. Let us know your area of interest and we will arrange a specialist to meet with you.

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