What is Succession Planning?

Succession planning in relation to the sale of a business involves identifying and preparing potential successors or buyers to take over the ownership and management of the business. It involves identifying potential buyers or investors, whether they be internal or external parties, evaluating their suitability, and developing a plan to ensure a smooth transition of the business. Good succession planning helps businesses maintain continuity, minimize disruptions, and ensure the long-term success of the business.

What is the Purpose of Succession Planning?

The purpose of succession planning in the context of a business sale is to ensure a smooth transition to new owners that minimises disruptions and aids in the continued success of the business whilst achieving the desired outcome for the exiting party. Steps that may be completed as part of a succession plan include obtaining a business valuation, giving consideration to legal and tax implications on the sale, the incoming party conducting a due diligence, negotiating terms and agreements and implementing relevant transition plans to transfer assets, contracts, and key relationships to the new owner. The goal is to facilitate a successful sale and provide a solid foundation for the future growth and prosperity of the business.

Why is Succession Planning Important?

Succession planning as it relates to a business sale is important to facilitate a seamless ownership transfer, maximise the business’s value and ensure the business’s long-term viability under new owners.

Business Transition and Succession | Davidsons Accountants

We understand what it means to build a business, and that for many people their business is their ‘superannuation’. Ensuring the maximum value is received for the business without creating an excessive tax bill has a major bearing on the level of comfort in retirement. Whatever the reason for selling, our expert team is ideally placed to assist in the successful transition of the business to new owners or the next generation.

Planning is everything and even if selling seems like a distant goal did you know that it usually takes a two to three year timeframe to properly plan and execute business transition?

We provide a specific suite of services that address the following critical questions:

What is the market value of my business?
Do I have a Business Owners Agreement?
Have I adequately cross-insured myself?
Will I walk away or attempt to sell?
How does my family view my business?
Have I identified a successor?

It is never too early to plan for the future, if you would like to discuss how we can help you set up your succession and/or transition plan please contact us today.

Business Transition and Succession

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