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21 Steps to Succession

Asset Protection

21 Steps to Succession

By , April 29, 2019

For Business owners an exit is a big important life event, yet most do no succession planning at all.  Barely a week goes by when a business owner does not approach us to say:

“I have about 18 months or 2 years before I would like to retire:
how can I get the most value out of my business?”

There is a much greater awareness among business owners of the need to prepare, not pray, for a successful exit. Following our proven 21 steps program for exit readiness is designed at maximising the value of the business. It’s organised into 21 steps around 5 stages.


Stage 1: Identify Value  

  • 1. Involves getting clear on your personal goals & outcomes. Business is so much easier to be in when it is working for you, as opposed to when you’re working for it.
  • 2. Collecting the facts from you personally and your business. Any journey starts with clearly defining where you currently are.
  • 3. A top to bottom analysis of your business at a point in time. We go further than looking at the numbers (which we do a deep-dive on). We also assess the risks and opportunities that impact the value of the business. It’s all about harmonising the business’s future with your own, both personally and financially.

Stage 2: Protect Value

  • 4. Is about establishing a suitable set of financial objectives from your business personally. On average we in the western world are living about 20 years longer than we did a century ago, therefore adequate provisions for retirement as well as lifestyle factors need to be made.
  • 5. Tends to be the most overlooked and easily addressed risk we see in small and medium businesses. Laying down proper infrastructure to deal with the shock of a sudden absence of a business owner.
  • 6. All businesses contain risks. The lower you can get them in the aggregate, the more valuable your business.

Stage 3: Maximise Value

  • 7. Clarifying exit options – of which there are far more than simply selling to a competitor one day. Many clients think of this as a very enlightening exercise, “I did not know that was a possibility for me” is a typical comment we receive.
  • 8. Strategic planning business model – again one of the simplest yet most neglected things in business. Without a business plan, it is very difficult to convince anyone (including potential purchasers) of a destination.  
  • 9. The financial component to the business plan – arguably one of the very most important pieces.
  • 10. Systems and procedure are heavily touted as a strong business value building tools – and rightly so. Documentation and systematic methods to produce results are looked upon very favourably by any type of investor or purchasers.
  • 11. Similar to broader business systems, systematic marketing and sales are a great big value add.
  • 12. Corporate governance, quite possibly one of the most difficult things to master, but one of the greatest value adders you can implement as a small or medium business owner.
  • 13. Employees do not tend to understand business, and the temptation is to focus on one’s own interests, rather the profits (or the financial health) of the business, leaving the owners to be often totally responsible for it. Ownership Mindset is a set of managerial practices designed to completely reverse this.
  • Step 14 There is a war for talent in the developed world, and the UK is no exception. Lots of businesses try to establish incentive systems with good intentions, but through inexperience and inadequate tools, they often create something that is dysfunctional. An Employee Ownership Scheme (including options) is a system that grows alongside your business.
  • Step 15 ESOPs are not the only thing you can do to minimise the risk of key person flight. Good old fashioned managerial succession planning is one and we cover it here.

Stage 4: Extract Value

  • 16. What a buyer pays for your business is not necessarily what you receive in your wallet, HMRC will insist on their part. There are strategies you can implement to maximise your net proceeds, but they often take time to season.
  • 17. A disorganised seller is asking for the buyer to downgrade the price and terms. Step 17 is about getting on the front foot as a vendor, and controlling the process.
  • 18. The actual sale itself.

Stage 5: Manage Value

  • 19.  By this time, your asset picture has completely changed. Instead of being dominated by one large investment (your business), you should instead have a large amount of cash to invest. It’s crucial to do this well.
  • 20 – 21 By this time, you may be in retirement or semi-retirement, and different kinds of risks arise to your net wealth. Plans for care and ensuring your financial legacy goes to the right people (e.g. not a child’s acrimonious ex-spouse!) to name but a couple. You’ve worked hard to get where you are, you must protect it.


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.