Date: 30th October 2017
Stepping away from, or selling up your business, is a massive life event. You may be overwhelmed by emotion and, without proper succession planning, this may lead to poor decision making.
A recent Xero survey found that almost 10% of business owners are likely to retire in the next year and Statistics NZ numbers suggest that up to 25% may leave their business within 10 years. Many of these businesses do not have a succession plan or exit strategy in place.
Let’s look at the potential risks of not having a succession plan and how to go about forming one.
“We’ve got a whole heap of baby boomers starting to come out of work life and looking to retire as the statistics say, and that’s kind of scary that 90,000 businesses in New Zealand are looking to get out of business shortly,” said Xero New Zealand manager, Craig Hudson.
What’s at stake if you don’t have a good plan in place?
“Small businesses need to step up and start planning for long term now. Get your books in order; make sure you’re checking in with your local business advisor, accountant and starting talk about what is your potential exit strategy and what your business today look like value-wise.
“You need to be having these hard conversations now so that you can be looking to the future.”
-Craig Hudson, Xero New Zealand
Preparing your business for a change of hands is complex and requires planning long before exiting. To begin the process you may like to start thinking about:
Long before your business is to be sold make a move towards getting your business in shape. This may include:
The first step in forming your succession plan can be as easy as having a conversation, either with friends, family or an advisor. We’re here to help, please get in touch.