Succession planning is an increasingly important topic for business owners today. A significant portion of current business owners have intentions to retire within the next 5 to 10 years, without having any sort of plan whatsoever. Even if your retirement date is not for a few decades yet, it pays to have one eye on the future whilst holding down the fort today. Here’s why:
“I start early and I stay late, day after day, year after year, it took me 17 years and 114 days to become an overnight success.” Lionel Messi
A common issue, particularly within the service-providing sector, is making sure your business is worth on paper what it’s worth in your head. A multitude of factors will impact how much you can get for your business and commonly stem from the business foundations and day to day management such as:
- Do you have a large amount of debt in your current business structure? Do you need a plan to reduce it?
- Have your revenues and profits increased consistently?
- Are you converting your leads into sales? If not, why? If you are, what’s your rate of retention?
- Do you have any obsolete stock?
- Do you get paid on time or are bad debtors a constant headache?
- Do you have a good relationship with your suppliers? Do you have key relationships/discount providers that can be transferred to new owners?
- Are any of your business relationships non-transferrable? Is there a way you can change that?
- Are you concerned about having sufficient cash flow each month to keep afloat?
Taking the time to break down how you generate your business profit and developing a plan to improve each aspect can have a phenomenal impact on your sale position. This is where strategic advice can play a valuable role
Work with the right people to get you there
Working with a business advisor can help you achieve the numbers you need. Sometimes highlighting the true reasons why you aren’t producing the results you think you can is a job best left to a trusted advisor.
At Accru we can help break down these issues and hold you accountable to achieving your outcomes. If you would like to discuss your succession planning get in contact with your local Accru office.