What happens when you leave?

It's not something people like to think about let alone talk about, however it is inevitable that one day in the future you will leave your business.

Whether it's a decision to sell up, time to retire or your health has taken a turn for the worse and you are no longer able to work, it's imperative that you plan for that day. A succession, or exit, plan outlines who will take over your business when you leave.

A good succession plan will enable a smooth transition between you and the new leader with less likelihood of disruption to operations. By planning your departure well in advance you can maximise the value of your business and enable it to meet future needs.

It is important to ensure that your succession plan is attainable ? this can be done by setting a realistic timetable and measurable milestones along the way and stick to them.

 

 

Considerations

• Some things you will need to consider.

• Retirement Planning

  Sooner or later retirement has to happen. Rather than just leaving it to fate, setting a target date is a critical first step to avoid problems.

• Health Problems

  Many will be forced to retire due to health concerns. Health is a common factor in the decision to retire. This underscores the urgency to plan before it is too late.

• Business Value

  It is vital to determine what your business is really worth! What can be done to improve the value prior to retirement. Being forced into a 'fire sale' due to a sudden change in circumstances should be a last resort.

• Family Succession

  Will the business be passed on and if so how will the retiring owner be compensated? Too often such issues are left to the last minute.

• Insurance

  Key person insurance to protect the business is essential. Partnership agreements with appropriate insurance attached to protect a remaining partner due to unforeseen death or disability should be in place.

• Gaps

  Identify the possible gaps in your business if a key person left or became incapacitated. Identify potential candidates and implement training programs to fill these gaps.

• Estate Planning

  Address your arrangements and ensure your wishes are documented accordingly, ensuring beneficiaries are looked after.