If you are running a business, regardless of size, you should have structured and documented plans in place to ensure that the entity continues to exist and thrive beyond the time frame where the current management or owners would be expected to be involved. The process by which these documents are developed is called business succession planning, and failure to do this with sufficient thought and detail is the reason why many businesses struggle or fail completely when the time comes to hand over to the new guard.
MSI Taylor is an experienced accounting firm specialising in assisting clients to develop succession plans. If your business doesn’t have these plans in place, it is already at risk of unravelling should key people in the organisation leave abruptly with no successors selected or trained. Even though your company or business may be solid, with long-term contracts, skilled staff and sound management systems, there are key questions that need to be answered and actions taken based on those answers. And the time to act is now.
Some of the questions are quite basic e.g. when are the current directors/owners planning to retire? This seems simple enough but without a definite time frame, it is very difficult to prepare people for new roles while they are still giving all their attention to their current duties. A consultation with a business accountant at MSI Taylor who specialises in business succession planning will identify many more questions. Discussing possible answers with such an expert is an excellent place to start.
Now that we’ve started the ball rolling, let’s throw in another question. How will ownership of the entity pass to the new guard? This will depend, of course, on the existing ownership structure and what the intentions are e.g. if it is a family business, it may be that a change of directors is required. In that case, how will the purchase of shares be funded? If the intention is to sell the business to fund retirement, this is a whole different ball game. How will the sale be managed? Will the sale attract capital gains tax? These are questions best answered by an accountant Brisbane.
MSI Taylor has assisted many clients through the business succession planning process, and this experience allows them to raise issues that they are aware of, but you as the business owner or manager, may not have thought about. Issues such as protection of existing staff entitlements, guarantees of employment for a specified period of time after the transfer, the ownership of product licences and patents, the distribution of shares and many other considerations all need to be worked through and documented in the succession plan.
Once this has been achieved, the plan is useless if it simply sits on a shelf in the Board Room. MSI Taylor can also advise on implementation strategies and assist you with a structure that will guide you through the actions required and the time frames for completion. Having tools like checklists and action plans for significant milestones sets in place a process that anyone with the decision-making authority can follow.
With MSI Taylor guiding you through the whole process, you have an expert you can contact quickly if there is a problem, or a matter has arisen that needs a sounding board. Their client base is not confined to profit-making enterprises, but includes community organisations and not-for-profit companies, who all need succession plans for the same reasons that private enterprise does. It’s tragic that people spend years of their time, energy and passion giving service and providing products, and it often falls apart when the key driving force leaves the business. Don’t let that happen to your legacy.