contact us for further information
What is succession planning?
Succession refers to the transfer of the ownership and/or management of a business.
Ownership succession focuses on who will own the business, when and how that will happen. Management succession focuses on who will run the business, what changes will occur and when the new manager will be accountable for results.
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
management
The Bstar 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
Some businesses already have professional advisers who can assist them in this
important stage. Bstar can also provide assistance if required.
contact us for further information |
