The Australian workforce, like much of the world, is ageing. PwC reports that over the next several years, 33% of business owners will be over the age of 55, putting them in a critical place to start thinking about their retirement and business succession.
Although the lack of a succession plan leaves many business owners unsure of their next business move, MGI Australian Family and Private Business Survey found that 64% of business owners would consider selling if approached by the right buyer. To bridge the gap, modern firms must take steps to build their businesses with the future in mind.
WILL YOUR BUSINESS MAKE THE SALE?
Your firm’s mission has been to help your clients make major financial and life transitions seamlessly. With retirement on the horizon, you owe it to yourself to do the same for your own future. When done right, selling is an opportunity to re-evaluate your business, and add new value to make it sustainable long into the future.
However, the Exit Planning Institute (EPI) reports that 80% of businesses aren’t saleable in their current state. This makes it more important than ever for accountants approaching retirement to take control of their futures and prepare their firms for the sale. Often, this requires a shift in mindset along with key organisational changes.
THE DANGER OF LEAVING SUCCESSION PLANNING TO THE LAST MINUTE
Succession planning is a complex endeavour. Add to that the daily work required in operating a firm, and it’s not surprising that many business owners avoid succession planning altogether. However, planning is also a key to executing a proper exit that paves the way for a comfortable retirement. Without time to properly optimise the value of your firm, you run the risk of having minimal buyers and accepting any offer, regardless of how menial—or worse, no buyers at all.
Follow these four best practises to position your business to sell with the future in mind.
Partner with a Succession Planning Specialist Selling your business is a major stop on the road map of every business owner. However, research shows that too many owners are unprepared for this crucial milestone. According to The Australian, 66% of small business owners aren’t ready for succession, and more than half of them don’t intend to think about it over the next year. Having a partner on board can help firm owners navigate the murky waters of valuating, restructuring, selling and ensuring an optimal retirement, and ongoing business sustainability.
Strengthen your Team Despite the best intentions, passing a company into new hands often means the loss of valuable team members that have driven your company through the years. Don’t leave your team in the lurch as you plan out your future. Invest in them by diversifying their skill sets, and placing them in crucial positions within the company.
Position your Company at the Cutting-Edge Upgrading internal systems and tech infrastructures can increase your competitive advantage and create added value for your company. By embracing automation and workforce mobility at your firm, you can create a more sustainable environment and attract new talent.
Expand your Services Diversification is key in a digital age. With the ageing population comes a plethora of new financial needs. Accountants are uniquely positioned to take advantage of the demographic shift to add value to their businesses and maximise value for their clients and their buyers. Diversifying your services can ensure that you stay relevant for their every financial need.
Selling your business is complex, but that doesn’t mean it has to be overwhelming.
Implement the steps above to make it a welcome milestone that paves the way for a fruitful retirement.