Succession Planning

In ensuring the long term success of your business, and provide an exit strategy for the current owners it is critical to establish a well-designed succession plan.

Consideration of the most appropriate method for planning the transfer of your business can require an in depth discussion on occasions, with the current owners and sometimes the potential future owners.

Some of the steps involved in putting together a succession plan are:

  1. Determine the timing of when succession should take place. This will be a matter of when the current owners will be ready to pass on the ownership and when the business is in a position that a change in ownership will provide a successful result. It also may be dependent on when a potential successor is ready e.g. a family member has sufficient experience.
  2. Identify who the potential successor might be. There can be more than one option in this regard and the broad categories of possible successors are as follows:
    • Family Members
    • Employees
    • Third Parties
    • Corporate acquisitions

The decision as to which type of successor is appropriate will depend on the circumstances e.g. there might not be any available family members, or the employees of the business might not be at a level to enable them to operate the business.

  1. Systemise the business to the greatest degree that it can be. This will enable an easier handover of the business as it means the operation of the business isn’t as dependent on the existing owners. Further it can add value to the business.
  2. Value your business. It is important to have an understanding of the value of your business early so you are aware of what you will receive and how this fits into your retirement needs. At Bentleys we have a process that enables a value to be ascertained, but also enables you to assess the qualities of your business that could be worked on to enhance the value.
  3. Consider how the succession will be funded. Having an idea of who you want to succeed you in a business can end up with disappointment if that party is unable to fund the monies you need, to enable your retirement. Hence it is important to consider how funding can occur beyond the obvious of the purchaser funding it from their own monies eg. will vendor finance work with your plans.

With our years of experience, we can address the complex issues of business continuation, taking the stress off your shoulders, and getting you to where you want to be.

Contact us for more information on forming a plan that facilitates a hassle-free continuation of your business!