When you have a business, you should be thinking of an exit strategy right from the start. We have been working on our plans for the succession of IAS from myself to Jo when I retire for several years now.
I have been running IAS for the last 40 years. At 72 years of age, I needed to be mindful that I would not be working forever and a plan for my exit was required. We began discussing and preparing for my transition out of the business – handing the reigns over to Jo – around five years ago. However, I have been discussing business succession and preparing for this eventuality for many years.
If you are in a similar situation, or even if you are much earlier along in your business career, it’s important to consider how you will eventually manage your business succession. Will you, like me, be passing it on to your children? If not, will it go to another family member or business partner or is your ultimate goal to sell the business? These long-term considerations will shape how you operate your business today. I am very fortunate in that I have a family member who is the obvious successor, but for many people this decision is far more complicated.
Ultimately, the most important part of business succession planning is your clients. We have many long-term clients who have placed their trust with IAS for their personal and/or business lives and those relationships are vitally important to us.
Plan ahead for business succession
It takes a long time to organise all of the specifics surrounding the sale of a business, taxation considerations, and the practical steps of how a succession will work. We have been working with a solicitor, taxation specialist and a specialist accountant, as in our industry there are a lot of compliance, regulations and trust accounts that must be taken into consideration.
Over the past four years we implemented a plan to develop and mentor my team and combine client appointments with Jo and Teresa. This has enabled them to grow and develop their relationships with clients, which will ensure a seamless integration and continuity of client service and advice when I am no longer at the helm.
The personal impact of retirement
If, like me, you are retiring and handing over your business to someone else, besides thinking about how the succession will impact your business, your clients, finances and your family, there is also a psychological impact. I have always worked five days a week and thought about the business every day, so it is definitely a change of mindset. For me, it has helped to make this adjustment gradually.
Currently, I am working three days a week and still think of business five days a week. To move from five days to four days and now to three days took some time to get used to after 40 years in the workforce. You need to find other activities to occupy your mind and so you don’t go back to old habits and start working on your days off. Personally, I have found that golf has been an excellent activity and one in which you can make new friends and be outside enjoying yourself without a phone or computer.
Some tips for business succession planning
Start sooner than later – The earlier you begin putting a plan in place, the easier it will be, as you can tailor your ongoing business decisions to your business succession plan.
Develop your team – Thinking about succession issues early will help you ensure that everyone is getting the training and support they need to be ready to step up when the time comes.
Get the right support – In addition to advice from our solicitor, taxation specialist and accountant, we worked with a business coach to develop and implement our succession strategy.
Be realistic and flexible – While it’s important to start planning early, your plan doesn’t need to be set in stone. Have ongoing conversations and allow room for your plans to change and develop as your team grows and you figure out what will work best for everyone.
We now have a lot of knowledge about business succession planning from our own experience planning the future of IAS. We’re happy to help you put together a plan for your business. Call us anytime on (02) 8268 2900.