Succession Planning

It is commonly known that Australia’s population is aging.
It is therefore no surprise to know that the average age of small business owners is also increasing.

A study conducted by CPA Australia reveals the following:

49% of small business owners are over 50 years of age; and
40% of small business owners expect to sell in the next 5 years.

The Newcastle Herald recognised the importance of the issue and wanted to talk to us and one of our clients.

See what the Herald had to say.........
Herald article on Small Business Succession Planning

The implications of the succession bubble are:

Many more businesses will be on the market in the next few years;
Supply is likely to be greater than demand;
Only the better businesses will command an amount for goodwill;
Many business owners will have to accept prices lower than expected when they sell;
Some business owners will just have to close their doors and walk away.

Succession challenges being faced by small business owners:

Not having a clear understanding of what succession planning is;
An inability to differentiate the intellectual property within the business from themselves;
An inability to separate sweat and emotional equity invested in the business from their expectation of its value; and
The inability to differentiate their business in the growing marketplace for “businesses for sale”

Characteristics a business should exhibit to maximise its attractiveness:

Continuous business plan;
Clear and workable business structure;
Operates on systemised and efficient processes in all areas;
Defined organisational structure that is understood and works;
Employ the “right” people in the “right” jobs;
Market saleable products with planned and definable lifecycles;
Produce consistent levels of high profitability; and
Low level of reliance on owners input and presence.

At Evolution we specialise in assisting small business owners plan for succession within their business.

We have assisted many business owners build their businesses in readiness for succession and also assisted many undertake the succession process.