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Succession is more than selling

Succession is More than Selling

Reading time: 1 - 2 minutes

It is critical that business owners have a succession strategy. Many people are led to believe that succession means selling.

This isn't necessarily the case, however, as there are a variety of succession strategies available that are not widely considered by business owners.

Market trends show that strategies including business transition and syndication are becoming more popular with business owners planning for their succession.

Succession planning allows you to be in a position to make an informed choice about your exit and not having that choice imposed on you. Choosing the right exit option for your business is a crucial part of the succession planning process.

When determining your exit strategy it is also important to consider your life balance goals, as your life balance position will influence your choice of exit option. For example, if you are experiencing high business dissatisfaction or stress, selling your business may be the best option and would afford you the opportunity to pursue other interests.

The major issues for business owners considering their exit options are: retention and extraction of capital and to what level they are extracted from the business. By maximising the value of your business, you will be in a far better position to choose among the many different exit options.

The challenge lies in commencing the succession process early and choosing the right exit option to suit your circumstances.

Some of the exit options for you to consider include:

  1. Sell the business as a going concern
  2. Partial sale to a key staff member
  3. Merge with a business of similar size
  4. Sell part or a division of your business
  5. Sell shares
  6. Form or join a syndicate
  7. Create strategic alliances to transition your business
  8. Close down the business

Ensure that you are aware of all alternatives and the benefits available from each alternative, before deciding on your exit strategy. By assessing all options you will know that the decision you make is the right one for you and your business.

 

Speak to Clifton Accountants. Succession doesn't just mean selling your business.

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