Page 27 - Australasian Paint & Panel May-June 2021

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benchmarking, structural review and valuation we can deter- mine what exists in the business today and where there are opportunities and challenges which may affect the ultimate exit strategy. On most occasions, business owners do not have an exit strategy and are not aware of all the options. Our strategic planning process identifies which options are most suitable and what we need to do to maximise the opportuni- ty. In many cases there are several areas within the business, both financial and non-financial, that need to be addressed prior to any exit plan being implemented.
As a part of this review, we can usually determine the most appropriate exit option for the business owner given the business, personal and financial goals we have outlined. Then our work is designed to continually move the business down the path towards exit.
MANAGEMENT BUY IN
Management buy in - where key people within the business are retained and incentivised, with a vehicle in place for em- ployees to purchase shares is one succession path.
This plan operates over an extended period and has the add- ed benefit of attracting, retaining and motivating key staff within the business who now have a vested financial interest in maximising the value (as does the owner).
Most of the businesses I work
with require a minimum of five years to maximise the value and
prepare themselves to extract that value successfully.
This may not be suitable for all business owners. However just knowing which exit is the most suitable and what can be done to get a better result can focus business owners at- tention and efforts on making the business more efficient, profitable and less risky – all of which add to the value. In several cases we have worked with clients who subsequent- ly decided not to sell the business as in its “new form” it be- came less stressful and better matched their lifestyle as well as retirement planning needs.
In all cases, business owners must be prepared to make eve- ry decision considering whether it brings them closer to or fur- ther away from the ultimate exit strategy - i.e. begin with the end in mind. Investing the time to develop a strategic succes- sion plan is one of the most important financial decisions a business owner may ever make - without one the value in the business will retire when you do.
Succession Plus are specialists in providing proactive, focused and strategic advice for SME owners to manage strategic Business Succession and Exit Planning. More information successionplus.com.au
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