Leaving a Legacy?
Starting and growing a business is often about more than just money. It’s about leaving a legacy and making an impact. And, yes, it’s about building value to give a better future life. Without some planning will your business die?
A significant number of business owners expect the sale of their business to fund their retirement. Over 35% of all Brits having no pension provision at all, relying on their assets to fund post-work life. Since 2008, when the global financial crisis (GFC) occurred, many business owners actively delayed their retirement or exit plans. 22% of all over 55’s have extended their expected retirement date. More than 40% were unhappy with their current financial position.
Over 50%, unfortunately, will exit due to death, illness, divorce, dispute, financial distress, bankruptcy or other unforeseen events.
The Current Environment
The baby boomer generation started to reach their 65th birthdays in 2011. Nearly 11,000 Brits per week turned 65 in 2018. A further 2.5 million are expected to hit retirement age before 2026. The baby boomer generation is what is driving the number of business owners who are approaching retirement. The average age of small business owners in the UK is 49. The over-50’s start 43% of all new businesses. Many are looking at the exit of their business to fund their eventual retirement. This means selling the business or pass it on to the next generation.
Of all family owned businesses in the UK, more than half the business owners intended for the next generation to take over. Yet nearly 70% indicated that they were not ready to do so even though retirement age was looming or, indeed, passed.
80% of all businesses that are put up for sale never get sold.
There are 4 main reasons commonly attributed to this:
• Lack of preparation
• Poor financial reports
• Owner reliance
• Unrealistic price expectations
When to Start Planning
Too many business owners are in weak financial positions looking to sell. A lack of visibility on cashed-up buyers in the market is compounding the challenge of selling. It’s more important than ever to plan your business exit to extract the highest possible value. You can’t just start to think about it when you turn 64. If you don’t plan, you get a poor price. A good succession plan is a win-win for everyone. You get the best price. The buyer gets a good business and your customers and staff are looked after.
At Succession Plus we take a holistic view to succession planning. We look at your business and personal goals. We know that putting processes and systems in place to help you reach the best outcome. Getting the expert advice in management, taxation, employee incentives and accounting issues you need, when you need it, adds to the mix.
We’ve identified a number of steps that you can take to dramatically improve the performance and preparedness of your business. This changes the value you can expect on exit. We take you through those steps over a period of time as you go through the gradual stages of transition.
If you have been working hard in your business for many years to create wealth for you and your family, the proven 21 Step process helps you to realise the full potential of all your efforts and investment. These are the rewards you set out to achieve.
A Proven Bespoke Solution
Succession Plus helps mid-market business owners design and implement a business succession and exit plan to maximise sale value on exit. Business Succession and Exit planning has been the focus for Succession Plus since 2009. Making us well placed to help you realise the goals you set for your business succession, transfer to the next generation or sale.
We don’t try to give you a one size fits all or a ‘do it yourself’ manual, but you’ll get an understanding of the scope and processes involved in successful succession and exit planning. If you are close to retirement or need to exit quickly, you may not be able to go through all the steps. But we’ll steer you towards some crucial quick fixes to help you get prepared.
