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Ownership Succession: A Crucial Planning Pillar of Succession

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Ownership Succession: A Crucial Planning Pillar of Succession

By , December 15, 2023
Group of business persons handshake in the office

Ownership Succession Planning is a crucial aspect of succession planning that addresses the transfer of business ownership from the current owners, who may be the founders or other stakeholders, to new owners or a new generation of business leaders. The process involves ensuring that the transfer is done smoothly and efficiently, without disrupting the business’s operations or value.

A well-designed Ownership Succession Plan should include several key components, such as timing, legal and financial considerations, tax implications, and who will take over leadership roles in the business after the transition. The plan should also outline the process of transferring ownership, including how to value the business, how to transfer ownership of shares or equity, and how to protect the interests of both the current and future owners.

One of the primary reasons why Ownership Planning is important is that it helps to ensure a smooth transition of ownership, which is vital for the long-term success of the business. Without a clear plan in place, the transfer of ownership can be a challenging and stressful process, which can negatively impact the business’s value and reputation.

Ownership Planning also plays an essential role in an overall Succession Plan, which involves planning for the transfer of leadership and management roles in the business. By addressing ownership transfer separately, business owners can ensure that they are adequately prepared for the transfer of ownership, which can help to facilitate the transfer of leadership and management roles.

Some examples of Ownership Succession include employee share ownership plans, management buyouts, sales to outside investors, or other family members. Each of these options has its own unique benefits and challenges, and the best option will depend on the specific circumstances of the business and the current owners.

In conclusion, Ownership Planning is a crucial aspect of succession planning that ensures a smooth and efficient transfer of business ownership. By addressing key components such as timing, legal and financial considerations, and leadership roles, business owners can ensure that they are adequately prepared for the transfer of ownership, which can help to ensure the long-term success of the business.

Craig West

Craig West

Executive Chairman | Succession Plus

Craig West is a strategic accountant with over 20 years of experience advising business owners. His background as a CPA in public practice has provided invaluable experience in the key issues of concern to business owners.

In March 2014, Craig was appointed Executive Chairman of the SME Association of Australia, Australia’s largest small business organisation representing over 300,000 business owners.

In October 2014, he was awarded the Exit Planner of the Year at the Exit Planning Institute Annual Conference in Texas, USA, due to his innovative development of an exit planning process to help business owners maximise business value and achieve a successful exit.

Craig’s proprietary structure - a Peak Performance Trust - has won the Australia-wide award for the Employee Share Ownership Plan of the year twice in four years.

In November 2018, Craig launched SME Experts in partnership with Mark Bouris’ Mentored on Podcast One and quickly grew the monthly podcast audience to over 26,500 downloads; in October 2019, he released a new podcast focused on medium-sized businesses - Mid-Market Matters.

In July 2021, Craig joined the NSW Committee for STEP (Society of Trust & Estate Practitioners) – focusing on advising families across generations.

Craig has also launched a SaaS platform, Capitaliz (which captures the 21-step process), to assist other advisers internationally deliver advisory services at scale.

In November 2021, Craig was appointed Executive Chairman of NSW Leaders, a business mentoring group for leading NSW businesses.

In July 2022, Craig West received the award of Doctor of Business Administration for his research thesis titled “Examination of the key factors driving business exit options in Australian Small and Medium Enterprises.”

Craig is passionate about encouraging business owners to think strategically, maximise the value of their business and achieve a successful exit.

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