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Planning for the future, your future!  

Leaving your Business may or may not be in your thoughts right now but at some stage you will decide to leave your Business.  

Being prepared for that occasion will make it easier.  Whether it is to sell, retire or do something else, having a succession or exit plan in place will help you transition smoothly out of your Business. And who wouldn’t like that!  

Succession planning makes sound business sense as it can be the answer or solution to an unexpected event, such as illness or death, helping take the stress and worry out of a difficult time.  Early planning can also help to maximise the value of your Business.

For example, there was a large export manufacturing business and the Managing Director, David, was killed from an unexpected motor vehicle accident one morning.  The director had no will and no succession plan.  The role of Managing Director was allocated to his wife, his next of kin.  The wife had never worked in the business and had no relationship with the staff or with customers.  The business virtually collapsed without active management.  Don't you fall into this situation.

Your Succession Plan must detail the key requirements and any associated legalities. 

For example:

• Keeping the Business in the Family 

• Buy-sell agreement 

• Other options 

Keeping the Business in the Family 

For this option consider the services of a lawyer or Business advisor to provide advice regarding legal obligations and requirements relating to both the Business and family connections.  

Complexities with family relationships can arise, including matters concerning inheritance, management or ownership. Professional guidance can be beneficial for all concerned. 

Buy-Sell Agreement 

This document is a legally binding agreement between co-owners or partners detailing what will happen if an owner dies, chooses to leave or is forced to leave. 

This Agreement directs the circumstances for the share of the Business to be sold, who can buy and the price that will be paid for the share.  

Other Options 

Include; 

• Closing the Business.  

• Selling the Business 

• Arranging outside Management to run the Business. 

Closing a Business comes with its own complexities and processes, depending on your Business size and structure. Seek expert guidance to help you through the steps. 

The structure of your Business will determine the closing process. Each has its own requirements. 

Along with that, there are other key tasks to get your final affairs in order, such as meeting any tax obligations, managing employee matters, canceling Business registration, etc. As you can see the list of ‘to do’s’ is comprehensive. 

Selling a Business 

For many a big and sometimes hard decision so it's worth taking the time to carefully consider the circumstances. Questions to ask yourself before deciding include; 

• Do I really want to sell or if you just need a break from my business 

• Are market conditions right for selling 

• Will I make enough money from the sale to support myself until a new income source is secured 

• Will I be restricted from trading in a similar business once I have sold 

• Is bringing in outside management an option 

• What are the ‘implications’ of selling. To fully understand consult a financial adviser, accountant or lawyer. 

If you are taking this option, there are many steps in the selling process. Information is available at;

Succession Planning 

Let us help to plan for a smooth retirement, an exit with ease of mind. 

Contact Blackburn Accounting, we can help guide you with the option best suited to your Business situation.