“Succession planning is already a key issue – yet by 2020, when the oldest Boomers hit their mid 70’s, we will witness the biggest intergenerational wealth transfer in history.” says Mark McCrindle, social analyst. “We are headed towards the biggest leadership succession ever.”
Within the next five years, most baby boomers will be looking to sell or transition their business. There will soon be a time when the number of businesses for sale will significantly exceed potential buyers, so it is essential to start preparing your business for succession right now. . The decision to sell or transition your business is likely to be one of the most important ones you will ever make!
If you have started the succession process, you will know that the buyer will be looking to minimize risk and maximize profit. The higher the perceived return on investment, the more attractive the business. Every business owner should be looking to maximise the value of your business, as the proceeds from sale or transition are likely to be a primary source of funding for your retirement.
If you are like most business owners the amount of money you are able to receive for your business will have a direct impact on how you live the rest of your life, so the rewards for increasing the attractiveness of your business can be substantial.
Here are some key questions to start considering right now:
There is a risk that without adequate preparation, your business may fall apart after your succession. It is essential to prepare your management team for your absence and look at key areas to improve as your succession approaches.
2. FORECAST FACTORS
3. MARKET FACTORS
It’s important to ensure that key processes are institutionalized to avoid loss of knowledge and connections after your exit. Creating a well-developed marketing plan will help a buyer to envision your business after your succession.
4. INVESTOR FACTORS
It’s important to assess the reasons behind your sale and sell at a strategic point, not when you are desperate. We encourage you to start this process 12 to 36 months prior to your desired sale date.
Our complimentary Business Value Attractiveness calculator will assess your business, offering an attractiveness score out of 100 and send you a detailed report to improve your business. This free report will help you start your succession planning and its immediately available online at https://ascendpartners.com.au/#syb