This episode is a recast from the Queensland Business Hub discussing the topic of succession and how to get it right for your business.

This episode is hosted by Craig Barry and Scott Lindeblad with special guest Peter Andreassen, and they discuss what succession means to them, because this tends to mean different things to different people. It can range from passing the business on to the next generation, selling the business for the maximum possible price or perhaps even getting the business ready to list on a stock exchange.

Succession is a journey, not an event – it doesn’t start on the day the business is listed for sale and it doesn’t end on the day the business sale occurs. It covers a period far longer than that. This episode discusses three important aspects of the succession process; structuring for succession, maximising value and preparing for the future. 

The mantra to go by is don’t leave succession until the last minute. Business owners should regularly review their structure and ensure that not only the structure is fit for purpose, but also succession ready. Craig, Scott and Peter discuss the “4D’s” (divorce, disease, dispute and death) that contribute to half of all businesses being put to market, prior to the optimal time to sell. 

The part of succession that most business owners concentrate on is the “maximising profit” side. This can look like paying family members less, putting off non-critical expenses as maintenance or revaluing assets in the financial statements. However this episode explores why maximising value is arguably the least important part of the three succession limbs. 

Preparing for the future of course includes getting financials in order and making sure the structure makes sense but the other important aspect to consider is the soft skills of the people taking over the business. This is where involving a business advisor, such as an accountant or lawyer, with specific experience in dealing with family business becomes critical. 

LINKS:

Queensland Business Hub - Digging With Accountants Podcast