Succession Planning for Small Business

Small Biz Matters – a half hour program each week where you can work ON your business rather than IN it.
with Alexi Boyd from Boyd Office Management Services
Date: 13 February 2018

Today on the program we’re talking to an expert about a side of running a small business very few people think about … but we MUST. Succession.

Planning to finish. How many of us included that in our business plan when we started all those years ago? Well, it SHOULD be. What is the process and what can you expect to happen? Often when we consider selling it might not be under the most pleasant of circumstances so you need to be prepared.

Today’s expert is Canaan Lim who is an industry leader in business buying and selling. He’s here to share his expertise on (this week) the selling process.

Welcome to the show Canaan.

Topics we’ll be covering:

• Under what circumstances might you find yourself wanting to sell
  • Changes in lifestyle
  • Suddenly realising the value in your business
  • Approached by a potential buyer
  • Perhaps kids have expressed an interest in being involved
  • Psychology - are you prepared to sell when the time comes, you should always be looking at your exit strategy when you start a business - and death isn’t an exit strategy…. Am I the business?
•  Understanding the processing of selling your business
  • What needs to be up to scratch -
    • A smaller business you’re looking at P&L and Tax Returns, lease copt of franchise agreements
    • MUST have ATO Tax Returns & BAS up to date
    • Timesheets for staff - a couple of months AND YOUR timesheets - what is your involvement in the business?
      • Should you be thinking of a management strategy or employment strategy
      • Sometimes an exit can bring about an expansion - you look at it from the outside
    • Equipment leases
• What reporting should you have in place
  • The more the better?
  • Don’t Balance sheets form part of the purchase price? NO. You don’t take on the company that owns the business. You buy the business name and entity. So any liabilities/debts remain with the leases will be taken over
• Is it a difficult process?
  • How long can you expect it to take?
  • Is there a good time in the business year to transition?
    • New FY or best time to do this? Busy or not?
  • Who do you need to engage to help?
    • Good business broker - how they help? Licences up to date
      • Setup a face-to-face meeting
    • Goof legal team to check over the contracts - fast response time is important, charges
• And finally, all the due diligence in the world doesn’t replace your ability to run the business after you’ve purchased it. And for this reason, we’re going to welcome Canaan back to the program in a few weeks’ time to chat about the other side - BUYING a Business.

To find out more go to their website: https://www.nswbusinessagents.com.au