Planning to succeed - business succession
Planning for business succession is about creating value.
Your business is most likely your primary investment (future value) and source of income (cash flow). If it’s not, it’s a hobby!
Basically, there are two ways to benefit financially from owning a business. Both come down to the business being able to generate cash flow, profitably.
Either you reinvest cash flow in the business or you take cash out of the business and use it for personal or investment purposes. Both options have their advantages and disadvantages – for example, if you own a business with good growth prospects, reinvesting in the business can create something much bigger and more valuable than if you simply milk profits from it; if you never take money out all your wealth is tied to the future of the business – your risk is concentrated rather than spread around a bit. It’s not a one or the other choice – usually you will want to do both.
So where does “succession planning” fit?
It’s about starting with an end in mind. Have some clear objective about why you are in – or want to be in a – business. What do you want from the business and what is the best way to achieve this? Once you work this out you can start putting plans in place to achieve this. These plans can be implemented and tweaked as the business thrives and survives.
What we do is:
assist you to identify what you want from the business (purpose) and most importantly, work through how to achieve this (plan).
assist you to implement improvements.
You know your business, but like most endeavours, no one person is expert in everything.
Our process will tease out the changes which can help achieve positive changes – these could be identifying additional staff skills required, marketing and sales, operations, logistics, in fact looking across the entire business process to identify where practical improvements can be made.
It’s important to prioritise these changes - which is effectively what a plan is – and then resource and implement. We are able to assist with sourcing people to help make the changes. We don’t put ourselves out there as experts in everything but we know people who are, if you don’t.
as licenced financial planners we are able to assist you and your family with your personal wealth creation and protection strategies. Investments may be part of this but it’s also about helping you ensure if something unexpected happens you don’t lose everything.
when necessary assist you with the transition from what you are doing now to life after your current business.
Our process requires some of your time, but not an excessive amount, and is spread out over an appropriate timeframe. We work in with your requirements. We charge a professional fee which reflects the value we create for you – it’s an investment with a return, not a cost.
For further insights, watch our Planning to Succeed video on YouTube.
For a no obligation discussion call Chris McGlinn on (03) 5330 3988 or use our Contact Form.