Prepare an exit strategy in Perth
Minimise risk by having an exit strategy in mind
Research has repeatedly shown that businesses which are prepared for the owner’s exit are significantly more likely to succeed in the future than those which have not. These guidelines on how to prepare an exit strategy in Perth can help your business legacy live on and give you a satisfactory result.
1. Preparation delivers the best results
The key message is this: it pays to prepare an exit strategy in Perth now – don’t wait until it’s nearly time to go. Life is full of unexpected turns and you may not have the time to do what’s needed to get the best results.
2. The main barrier
The chief impediment to a successful exit strategy is procrastination. It’s all too easy to convince yourself that you’re too busy at the moment, that you’ll start the process next year or whatever future date you rationalise as being reasonable.
All sorts of issues could underlie this procrastination. One is the dislike of facing up to the future; another is a reluctance to delegate responsibility to others. Like many business owners, you may have persuaded yourself that no one can do it as well as you.
3. Develop a succession team
There are advisors out there, such as accountants, who have helped other business owners formulate and help you prepare an exit strategy in Perth. Find them and tap into their knowledge. There’s no point in reinventing the wheel on your own.
4. Make the business affordable
If you intend to pass on the business to family, or perhaps to a management team, one major issue can be making your business more affordable. You may need to make some structural changes such as separating the business into two parts: one company owning the operating part and a second company owning the assets such as your premises or your equipment. Retaining the asset owning part and leasing the assets to the operating part could give you a tidy retirement income, but these structural changes can take time to bed down. So again, don’t delay, start now!
5. Decisions and training
If family or management are your desired successors, you will likely face issues around fairness to everyone while retaining the skills of key staff. These issues will require careful thought and, again, you will benefit from the experience of your succession team. Their impartiality can help take the heat out of potential conflicts.
The next step is to start training your successor(s) – again, a process that takes time. One major hurdle business owners must often clear is learning to delegate.
6. Improve the business
If there’s no one suitable or interested in your family or management team, an outside buyer will be your next target. This is when your accountant can add value by helping you prepare the business for maximum sale value. Any recommended changes could range from better business systems with, say, an updated customer database, to tighter money management through key performance indicator monitoring. You’ll want to show the buyer they are gaining a well run business with efficient systems that will make the transition as painless as possible. Of course, all this is worth doing at any stage.
If your business is presently based largely around you, you’ll also want to show that it can stand on its own without you. Making these changes can take time. Did we mention that it pays to prepare your exit strategy now?
Comments are now closed for this article.