Succession and Transition Program
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The Succession and Transition Program, provides business owners, current and future, an effective method of transitioning business ownership.
The Program focuses on achieving three key outcomes:
1. To provide the exiting owners an effective sell down of equity taking into account timing, price and life style considerations
2. To provide new owners the opportunity to buy in to the business on a structured basis that minimises their risks and maximises their opportunities
3. Ensuring that the business transitions to its next phase in an seamless fashion
The Succession and Transition Program can be used for businesses with single or multiple owners. The Program has proven successful with many businesses across a range of industries.
The program typically follows a structured staged process which includes:
Owners Strategy
Current owners have assessed their position and agreed that their chosen succession strategy is to transition ownership to others – usually staff or family or a combination of both.
Education and Awareness
It is important for all parties involved to understand what is involved in transitioning ownership. This stage of the process includes an overview of owner’s vision, details on the process, likely timelines and the involvement required from current and future owners. In many cases this is the first time owners have shared financial and other information on the business.
Alignment
If business partners are unable to achieve alignment, the likelihood of success is very low.
This stage in the process provides future owners the opportunity to:
• Assess the business
• Understand how business ownership will impact their personal and family life
• Assess their financial position
• Consider their estate planning needs
Multi owner businesses greatly benefit from considering these issues in a team workshop.
Strategy
Now that current and future owners have achieved alignment they can now develop the businesses transition strategy.
This stage brings both current and future owners together to complete the transition planning process and includes:
• Agreeing price and business value methodology
• Timing of equity sell down - may be over a number of years
• Funding of buy in
• Joint assessment of the businesses SWOT
• Roles and responsibilities
• Remuneration and incentive structure
• Business Model
• Growth Strategy
• Governance
• Terms of shareholders agreement and other documents
• Goals and action plans
Advice
It is critical that all parties obtain tax, legal and estate planning advice.
We have developed a number of document and agreement templates which can assist the new shareholders in reducing time and costs associated with this stage.
Support
Ongoing support post transition is critical particularly where substantial change has taken place and where staff are transitioning to new roles within the business.
Ongoing support usually includes:
• Regular monitoring of business performance and progress towards objectives
• Review of the businesses remuneration and incentive program
• Review of the business growth plan
To contact us to arrange an appointment to discuss your needs, please call us on Telephone 1300 202 117 or bill.tyrrell@tyrrellsbusiness.com.au