As a business owner, you spend your working life focused on succeeding…
But who will succeed you?
When it’s time for you to let go of the wheel, or if something happens and you’re forced to, who will take your place? And more importantly, how?
Business succession requires a lot of careful planning and a great deal of experience to navigate to ensure you have a successful outcome. Here are just a few of the main elements that typically need to be put in place to ensure your business transitions smoothly and without losing value.
1) Contingency Plans
When everything is going smoothly it’s easy not to think about what would happen if you hit a rough patch. The stark reality is that there are many contingencies that could stand between you and a successful transition of ownership.
2) Business Insurances
Many of these contingencies can be covered by business insurance policies - key person insurance, buy / sell insurance, business continuance insurance, professional and public liability insurance just to name a few. But precisely what type of cover do you need? Who are the best insurers? And what are the tax implications?
3) Transition Planning
When the time comes for your succession to happen – and this may not be under your control – who’s going to steer the ship until the actual transition to the new owner is complete – especially if you’re not around to do it?
4) Tax Implications
This part is very complex and requires specialist tax advice to ensure that you end up with an optimum setup for your business and policy ownership. Advice in relation to the area of tax is absolutely critical when planning for a business succession as tax can determinate the net proceeds that actually flow on to you or your successors.
We hope that this article has given you a few ideas to ensure your business can transition smoothly and without losing value. If you would like to talk to one of Addept’s Tax Experts about your Business Plan, please do not hesitate to contact us on 08 8418 2111 or email us at enquire@addept.com.au.