With masses of Baby Boomers getting older and ready to exit their businesses, many owners of family-run businesses are having challenges handing over the reigns to their children.
In fact, according to findings from Pitcher Partners, Swinburne University and the Australian Research council, it’s a major issue. Over 75% of business owners have no exit strategy.
It’s something that is assumed but often not formerly spoken about between family members. It just happens without any planning, when the older family member retires. This lack of planning can cause major issues. Here are some questions to consider:
- What’s the true value of the business?
- What skills and training are required for the new owner to be able to run the business profitably?
- What level of equity are they going to receive when the business is handed over? And for what compensation?
- What does the handover process need to entail?
- How do you make the transition as smooth as possible for staff?
- How do you distribute equity fairly between all family members?
Richard Shrapnel of Pitcher Partners says that business owners give all sorts of excuses for NOT engaging in the planning process or at least communicating their plans with their family members. These include, “I’m still young”, “The business is not at the right stage yet”, “My family members are not ready” and “The market is not quite right.”
Of course, succession planning is an essential part of an exit strategy for all small business owners. It isn’t simply limited to family-run businesses. It also focuses on:
- When people sell their business to an external party
- When mergers take place
- Selling the business to employees
- Closing the business
- Facing bankruptcy
If you’re thinking of exiting your business at some point, it’s important to have a paln in place that helps you exit the business smoothly and also maximises your sale price.
On February 23, 2013 at the ‘2013 Business Turnaround Workshop’ on the Sunshine Coast these questions and more will be answered. Three leading business advisors will be sharing marketing, tax planning, succession planning, advertising, sales, asset protection strategies at the event. For more details visit http://kristinamills.com/2013-business-turnaround-day
Kristina Mills is a highly regarded direct response copywriter, marketing strategist, entrepreneur and success strategist having worked with and produced great results for some of Australia's most inspirational entrepreneurs, speakers, event companies, professional services firms, property companies, and internet entrepreneurs. She is the author of Invisible Genius Vol1 and 2, Freelance Copywriting Fast Track Course, Direct Mail Mastery, Web Copy Mastery, Invisible Genius Vol.1 and 2, Mortgage Broker Letters that Sell, Real Estate Letters that Sell, How to Create a Sales Explosion With Every Ad and Letter Your Write. To find out more about how Kristina can help you live your potential, arrange a free 15 minute phone chat.