Mike, With a significant number of our small business owners approaching the retirement age the need for a suitable Exit Strategy is becoming paramount. For a lot of family business the transition between generations needs to be well managed to ensure everyone’s interests are managed. For those that are looking for an external buyer I recommend starting the process at least 2 years in advance (3 years is even better). During this time you will need to document your own personal goals post owner/manager and consider how much you actually need to retire on and when. Depending on the answer to these questions you might be able to consider vendor financing of an exit and provide a hand-over / transition period. This is often helpful for the new owner but also helps with the exiting party to slowly enter retirement. I have seen more clients struggle post retirement due to the shock of having nothing to do then the stress of running a small business. Based on your comments in your question I suggest that you are ready to change and should do it sooner than later. Trying to sell a business where you have lost the passion for it becomes very hard and the frustration will often result in underselling the opportunity. Consider the time of selling too as there can be significant tax savings if you sell at the right time and huge costs if you sell at the wrong time as capital gains tax exemptions only apply in certain circumstances. If you think your senior tech might be suitable to take over then provide him with the opportunity. You might be able to employ someone to take on the day-to-day tasks possible via a subsidised apprenticeship role by promoting staff up into more senior roles as part of the succession plan. This might be advantageous to existing staff as part of the transition. In terms of the legal obligations you are right to be worried. As a Director you are personally liable for the actions of your staff should something go wrong - in the fire protection business if something goes wrong the repercussions are much more serious. If you are not the sole director you should consider who else is acting in that position and why. ‘Pty Limited’ company structures can have a single director so if you have anyone else in this role that doesn’t need to be there you may wish to change the positions. This doesn’t mean you need to change ownership / shareholding. Also if there is an opportunity to relocate the business to another premise I would look into this. If the business is sold you are likely to want it relocated anyway and the cost of this would be taken into account when preparing a valuation for your business. I agree that having a place to go to for solace has advantages and if you sell your business this will be necessary anyway. Maybe even consider a neutral place in a rental office to undertake commercial decisions or meeting potential buyers - somewhere else to leave the stress. If you need assistance in documenting your exit strategy or assisting in a transition arrangement don’t hesitate to contact us at CyrePartners to see how we can help. I hope this information helps - Regards Matthew
Mike, They say 'frustration' is created in a person, when there experience a barrier between where they are now and where they would like to be. A barrier, between you and your goal. Reading your question, it may assist to firstly carefully consider what is your desired end game? When thinking change, succession, exiting from a business, it can help to reach out and find objective, impartial advisors; that touch on all facets of the lifestyle you want. Do you know how much income you need to retire/leave your business? If something happens to you and you need to be bought out of the business do you know the value of your businesses liquid assets? Have you clearly identified your successor’s responsibilities? Have you identified the possible risks related to succession? There are many, many more questions that need to be pondered, when thinking though change. If you could provide some answers to these initial few questions, can then possible channel some more information and food for thought your direction. Finding a good, professional advisor can be a solid step in the right direction. All the best - Derek
Hi Mick, The first step is to get the business valued and see what you actually have and how likely it is to sell - you need to know exactly where you are at right now and what option is the most viable. From this starting point, it is much easier to design and implement a plan to maximise the value of the business and achieve a successful exit. Happy to help if needed.