There are several reasons why a business owner should need a business succession plan. Whether it’s planning to sell or planning to pass the business to a family member. For example, when you decide you no longer want to continue. Specific plans should be in place to make any transition smooth and efficient.
Otherwise known as an exit plan, a business succession plan highlights and identifies the necessary steps that need to be taken when leaving the business. This is to ensure that the business is being looked after and retains value during the transition. As always, being organised counts and early planning is key to getting the best possible results.
Where do I start when creating a Business Succession Plan?
Making any sort of plan should be smart:
S – Specific
M – Measurable
A – Achievable
R – Realistic
T – Timed
You should also identify the following
- Who your successor is, or is likely to be
- Whether the succession is part or full
- Any changes in staffing
- Any restrictions that may come into play, legal or otherwise
- The time frame until the business succession plan takes place as well as the time frame it will take to implement the exit strategy itself
- Any other legal considerations alongside risk management solutions
- Financial considerations; fees, tax, post-exit income options etc.
It is advisable to involve a lawyer when creating and implementing a business succession plan. The reason why is to eliminate or diminish the potential for disputes as well as keeping everything professional. Whether you plan on handing your business over to a family member or a potential purchaser, a lawyer can ensure that all legal guidelines are being met at all times.
Consult your Buy/Sell Agreement
The business succession plan is a legal document. It outlines the proceedings that take place in the event that an owner of the business leaves, for a variety of reasons. This document will determine what happens in this instance and how the business will be split or shared. Together with other important details that should be revised and understood, will be outlined in a business succession plan.
Last but not least, review.
Think of your business succession plan like your will. As your life changes, so does your will, and so should your business succession plan. Review it occasionally to ensure that all details are up to date and that it aligns with your wants and needs throughout your time at the wheel of your business.
GMO’s businesses for sale in Perth and Western Australia
At GMO business brokers we offer a wide range of businesses for sale in Perth but also in many other places within our state. We assist potential buyers to navigate through available businesses in the business sector they are looking into buying, but we also make sure buyers are aware of all the aspects that come with buying a business. Our business brokers ensure that buyers are informed about all the vital information about the business, pay a fair price and are guided through the complete process in a pleasant way. Our business brokers are a reliable partner for potential buyers and sellers. Please contact us when interested in buying a business in WA or selling a business in WA.