are you thinking of exiting in five to ten years?

Notwithstanding the fact that simply selling your business is not the way to fully meet your lifestyle or retirement needs, exiting your business whether via sale or some other mechanism can assist. 

You should have met most of your lifestyle needs and goals with the economic benefits of your business in the first 20 years of your business life.  A business exit is not likely to yield sufficient resources to meet all your aspirations on its own – but a successful exit can significantly add to the pot.  An effective business succession plan/sale/management buy-out is one that will allow you to obtain the most value from the process of exiting your business, and may involve achieving other non-financial objectives too.

A Business Succession Plan will not allow you to meet all your financial objectives if you’ve done nothing about these until you are ready to exit. It can however allow you to maximise the return available from the business asset (which should be one of many assets by this time) as you exit.

are you starting out or taking it to the next level?

Many successful succession plans are made within the first 10 years of a businesses establishment, years before anyone intends to exit. Why? Because successful and professional business people have learnt that a good succession plan is very helpful (and in some industries necessary) for facilitating and allowing the growth of the business in the first place.

Such business succession plans are reviewed regularly. These plans can create a business model of encouraging and bringing in new talent and also allow for the sharing of ownership – the bringing in of new capital.  The combination of new talent and new capital is the key to a growing business. The certainty of how to get assets out of a business tends to encourage the inflow in the first place.

There are many models of successful ‘exit’ - which should make you feel positive. There are however many factors required to make an effective succession. We have provided a host of resources in this site to assist you to gain an understanding of some of the issues.

(These resources do not address the issue of taking your business to public ownership or of technical resources for the preparation and sale to private equity funds or institutions. They are specifically for small to medium-sized businesses where the purchaser is a small businessperson/s).

What kind of service and support can you expect from our consulting service?

Most consultants and businesses providing assistance in business succession planning provide either a “soft” process approach or “hard” process approach in their services. 

A “soft” process approach is a focus on the family business relationships when there are multiple family members in the business. This approach focuses on:

1. successor training and culture,
2. incumbent readiness to exit,
3. leadership style issues,
4. an inclusive and highly communicative succession process, a documented succession plan and so on. 

A “hard” process approach has a more technical focus, looking at such things as:

1. business tax,
2. the business model,
3. staff roles,
4. business group structures,
5. asset protection of incumbent and successor,
6. tax effective asset and income planning and so on.

You can see the services and concern of practitioners in this area fall into these to ‘camps’ from a reading of the resources provided below and from a cursory search of the web.

ascendia service

The ascendia model for business and succession planning uses a holistic approach. This combines elements of the "soft" and "hard" processes and a multidisciplinary team of professionals with substantial experience.

We think you need the “soft” issues to be managed and they need to be right or the succession won’t work. However we think you’d be disappointed if you didn’t deal with the tax and asset protection issues, your own financial planning issues as the exiting party and the ongoing sustainability of the business (particularly if you continue to obtain a revenue stream from the businesses success).

Our team comprises:

1. the business principal (you)
2. the major decision-making and business influencers
3. an experienced Business Succession Coach
4. a Tax Consultant specialising in business succession and exit planning including CGT rollover relief, business licensing and tax planning aspects particular to the situation 
5. a Certified Financial Planner specialising in businesspersons exiting a business including establishing tax effective income streams, use of ex-business entities where beneficial, liability run off and asset protection planning
6. a Legal Consultant specialising in business practice  - development and provision of legal instruments to effect the agreements required to effect the succession.
7. the successor.

Our approach is consultative and carefully facilitated to an agreed, documented process. Legal, tax, financial and investment advice is detailed, specific and comprehensively documented.

Because Business Succession Planning is so specific to a business and the owners’ particular needs and situation, most online resources and references(which are, of necessity, general in their scope and application) can be misleading to general readers. Accordingly, professional guidance should be sought for your asset protection planning needs.

What kind of resources can I get on the web?

1. “Soft” process articles and resources
   Resources of this type are largely dominated by the business and management schools and are academic in nature. Articles provide a lot of proscribed approaches but few if any, are road tested or show evidence of being used or developed by practitioners. Many are labelled “9 step process” or “5 step process” and are touted as being indispensable for the successful achievement of an effective business succession. The issues raised are interesting and provide a strong common sense guide of factors to consider – so as to not forget anything important in developing your business succession plan and implementing your process.
   
2. “Hard” process articles and resources
   Resources of this type are largely found in the legal, accounting and financial planning fraternity. The resources are not mindful generally of business succession issues as a whole planning process as the “soft” process approach clearly is. Instead the “hard” process is a scattered approach offering an issues by issues focus to the concerns of business people attempting a planned succession or exit. Often issues are presented in a technical and jargonistic manner. Examples of this are resources relating to capital gains tax rollover relief.

Internet resources can be useful as a starting point for considering your business succession planning and identifying issues for consideration. For a tailored approach to your individual situation we do urge you to seek professional help and we are very happy to discuss this with you.

This service is available via ascendia wealth pty ltd.

 

ascendia references:

BRW Article - keeping it in the family.pdf

The Age Article - the ageing small business owner.pdf

BRW MBO Succession Planning Article.pdf

KPMG Survey Succession Planning.pdf

CPA survey - small business owners set to retire.pdf

Monash Study on Succession Planning.pdf

selected technical references:

Please follow this link for a page of references illustrating some of the major legal issues involved in business succession planning.