If you own a business, you may have thought about what will happen to it when you retire, sell, or pass away. Who will take over? How will you ensure a smooth transition? How will you protect your legacy and your family's financial security?
These are some of the questions that succession planning can help you answer. Succession planning is the process of preparing for the transfer of ownership and management of a business to the next generation or a new owner. It involves identifying your goals, assessing your current situation, developing a strategy, and implementing it with the help of professionals.
Why is succession planning important?
Succession planning is important for several reasons. First, it can help you maximize the value of your business and minimize the tax implications of the transfer. Second, it can help you avoid conflicts and disputes among your family members, partners, employees, and customers. Third, it can help you ensure the continuity and sustainability of your business and its social impact.
According to a PwC Family Business Survey, only 25% of Australian family businesses have a robust and documented succession plan. This means that many businesses are at risk of losing their competitive edge, their loyal customers, and their talented employees. It also means that many business owners are missing out on an opportunity to create a lasting legacy and a positive difference in their communities.
How can financial planners help?
Financial planners can play a key role in helping you create and execute a successful succession plan. They can help you:
- Clarify your personal and business goals and values
- Assess the current value and performance of your business
- Identify potential successors and evaluate their readiness and suitability
- Develop a realistic and tax-efficient exit strategy
- Coordinate with other professionals such as accountants and lawyers
- Monitor and review your plan regularly and make adjustments as needed
Financial planners can also help you address other aspects of your financial well-being, such as retirement planning, estate planning, insurance planning, and investment planning. They can help you align your personal and business finances and ensure that you have enough income and assets to support your lifestyle and your legacy.
How to get started?
If you are ready to start planning for the future of your business, here are some steps you can take:
- Contact a qualified financial planner who has experience working with business owners
- Gather relevant information about your business such as financial statements, tax returns, legal documents, etc.
- Discuss your goals, expectations, challenges, and opportunities with your financial planner
- Work with your financial planner to develop a comprehensive succession plan that suits your needs and preferences
- Implement your plan with the support of your financial planner and other professionals
- Review your plan periodically and make changes as necessary
Succession planning is not a one-time event, but an ongoing process that requires commitment, communication, and collaboration. By working with a financial planner, you can ensure that your business is in good hands and that you can enjoy the fruits of your hard work.
Call us on 0493 561 023 or email hello@northstarfp.com.au to discuss this further.
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