With retirement around the corner, a business transition is inevitable. But between running your firm and implementing new technology, it can be difficult to find the time to properly prepare for your succession.
How will you ensure that your firm passes to a successor who values your business and clients the way you always have? The process begins with a smart exit strategy. Your exit strategy is perhaps the most important part of your business plan, as it gives you the opportunity to shape your legacy. Without a plan in place, smooth transitions can quickly get rocky—especially as you begin to market to, and evaluate buyers, designate a family or employee successor, or commit to an acquisition. Crafting a plan will help position you to get the most from the pending change, and ensure the maximum profit upon your exit.
Here are four actions you can take today to position your business for a more successful succession and a more comfortable retirement payout.
GET YOUR FINANCIALS IN ORDER
To position your business for a successful transition, it’s crucial to prepare financial information and statements ahead of time. Compile your audited statements for the last three years to show the profitability of your business. By having financials available to potential successors, you can help buyers see current revenue and envision the possibilities for future growth. This preparation can also streamline your negotiation process.
POSITION YOUR BUSINESS FOR ONGOING SUCCESS
As the financial industry grows and expands into the digital age, companies with a single-revenue model will struggle to stay relevant. Forward-thinking firms are expanding their offerings so that clients can get all their key financial products, services and advice from the same place. To ensure your legacy stays relevant to clients’ needs, consider incorporating additional offerings and all-in-one financial packages into your current business model. When it comes to your successor, don’t just seek someone who shares your vision. Instead, find someone with the foresight to continue expanding your business model so that it thrives into the future.
ENTER THE DIGITAL AGE
The rise of Fintech has ushered in new apps and technologies that redefine the way clients and their advisers do business. Despite the ubiquitous nature of technology, many baby boomer accounting businesses struggle to stay relevant in a digitised age. By updating internal technology and processes, you will make your business more appealing to potential successors and significantly increase your company’s value. As you seek a successor, make it a priority to find someone who can leverage emerging technology and social strategies to take your business to new heights.
PARTNER WITH EXPERTS
One of the most common concerns among retiring business owners is maximising the revenue from the business they’ve built over the last several decades. The first step in overcoming this challenge is adopting more effective business offerings and technology—both of which will position your company for a more lucrative succession. But don’t stop there. Partner with a like-minded organisation to ensure that you create and follow a solid succession path that maximises your returns. These specialised partners can help you with succession preparation strategies such as building your brand, increasing your firm’s value and boosting your payout.
Succession planning is a complex process, but you don’t have to conquer it alone. Schedule a call with our seasoned succession planning experts to see how you can maximise your profit and ensure that your business passes responsibly into capable, future-focused hands.