Succession planning has been a popular business topic for many years now. But is it a relevant topic?
If I reflect back on the successful transactions I have been involved with, inevitably they all started with the bones of a cunning plan – usually the owner(s) had the basics in place and they just needed some help to clarify some of the important steps to make those goals a reality. Mix it all with a bit of market feedback.
There was also a point in the process where the owner(s) gets an appraisal of where their business is at value wise and what are the key points on how that value can be maximized.
This is not a one-size fits all – “all businesses in your industry get X multiple”, but a real appreciation of what choices are available to the owner(s) and the pros and cons of each option.
This is not a case of ‘you need to have good financial statements’ or ‘all your business dealings should be documented’ – although these can be very helpful. It’s more about truly understanding what value is protected or added to your business by the actions that you could take.
From there you as the owner(s) can make some vital decisions, taking some comfort that you are making those decisions in an informed way, as opposed to just rolling the dice.
The worst case scenario is that as a business owner you can take comfort that you have a robust business that is still very valuable to you in the meantime. And that is a good place to be.
So yes – succession planning is still very relevant. Your succession plan doesn’t need to be complex, but it should be clear and informed.
If you would like to discuss what the succession plan for your business might look like, contact us.