One day you will have to leave your business – whether its because you retire, you pass the business on to your family, you sell it to an interested party, or because of health circumstances.
Whatever those circumstances are, you always should have a plan to deal with what happens when that day comes. A failure to do so will likely result in your business suddenly coming to an end if something happens to you.
A succession, or exit, plan outlines who will take over your business when you leave or if something happens to you.
A good succession plan puts into place a process that will enable a smooth transition from you to your successor, that minimises disruptions to your business resulting from that transition. A good succession plan also gives potential purchasers peace of mind that the business will not fail the moment you leave. Putting a succession plan in place can maximise the value of your business and enable it to meet future needs or deal with unexpected issues.
What an appropriate plan is will depend on the nature of your business as well as the structure of your business. Some of the questions that you will have to ask are:
- How long do I want to be in business?
- Do I want to sell the business eventually or do I want to hand it down to my children?
- What business structure does my business operate in?
- What are the assets and liabilities in my business? Who owns them?
- What is the goodwill and intellectual property in my business? Who owns them?
- How big is my business?
- Who can run my business if I am not around?
- Do I have any processes or procedures for my employees to follow, so that if something happens they can act “automatically”?
- If I were to sell my business, do I have a handover strategy?
If anything, see your business coach, accountant, or lawyer – they can certainly help you out in relation to identifying these issues and assisting you with your business succession plan.
A good succession plan enables a smooth transition with less likelihood of disruption to operations. By planning your exit well in advance you can maximise the value of your business and enable it to meet future needs.
Why choose Phang Legal for your business?
There are many lawyers and law firms to choose from, but it can be challenging to make the right choice. At Phang Legal we are dedicated to serving other business in the best way possible – after all, we know what it is to run business and to be a consumer of professional services ourselves. We appreciate the value of professional advisers who can provide the right service at the right price and we aim to be what we expect most. We deliver nothing less and we think you should expect nothing less.
With our offices conveniently located in Parramatta, the geographic centre of the Sydney metropolitan area, our lawyers assist businesses from across all suburbs of Sydney and beyond.
Associate Solicitor – Sydney