There are countless people in our society who have worked hard for many years, establishing and running successful businesses through good times and bad. Their efforts have seen them provide work and advancement opportunities for others, develop new and innovative products that have improved standards of living, and established a legacy for their descendants.
Why is it so hard, then, for many of these people to recognise that a time will come when they need to move aside and get their business ready for the day when they are no longer involved? Perhaps it has a lot to do with the character of people who start with nothing and build something extraordinary. Typically they are not the types who give up easily, nor are they entirely comfortable with allowing others into a world they have created.
Clear Exit Strategy Needed for Business Owners to Enjoy Retirement
It is certain, however, that if they do not plan carefully for a hand-over to the next generation, their lifetime of achievement could end up in a messy and expensive court case that could negate their legacy. At Charter Partners we can speak from experience as we have assisted many of our clients to establish succession and estate plans. They now have a clear exit strategy ready for the day when they decide to move on.
Many Business Owners have no Succession Plan
Unfortunately, less than half of Australian small business owners have made clear plans to capitalise on the value of their businesses when the time comes to do something different. This can result in a number of equally frightening scenarios. Bitter family feuds can start that divert energy and intellectual capital away from otherwise thriving businesses. Management control may fall into the hands of people without the necessary skills.
Whatever the circumstance, the outcome is always the same. The business is devalued, and the founder, instead of enjoying a deserved retirement without money worries, is left with little to show for a lifetime of work.
Independent Assistance Forces the Issues to Surface
When a strategy is facilitated by experienced succession planners, business owners are forced to confront the issues that have most likely caused them to avoid the process in the first place. We ask them difficult questions like who will succeed them in running the business, and put in front of them many other issues like how to resolve disputes and mitigate risks.
Estate Planning on the Table
We also discuss estate planning which is another part of the process. It focuses on the legal issues around any inheritance, its impact on the long-term survival of the business and other, equally difficult issues that must be faced on the death of the business owner. At Charter Partners, we provide this service to our clients and give them a blueprint for facing their retirement with excitement instead of trepidation.