Have you given any thought to the next stage for your Business, to “Succession Planning”?
In a recent article in the Irish Independent, John McGrane of Family Business Network Ireland said there should be motivation for families to pass on their business.
More family business owners are looking at passing on assets while valuations are low as a result of the pandemic in order to cut their tax bills, business advisors say.
Financial advisers are reporting greater demand for inheritance and succession planning while the pandemic depresses the value of business assets and makes capital acquisitions tax (CAT) on transfer more affordable.
Selling your Business or passing it to a Family Member(s) may not be on the Radar yet, but it may be in the future.
Where do you start? The best place to start is with knowledge and a plan!
Knowledge – Did you know?
- Value: If you’ve never had your business valued then it’s always worth less than you think, honest. A buyer does not pay for the potential you see.
- Time: If you’ve never been through a sale process it can take 12 – 24 months to get your business ready for sale. A buyer is going to tell you “it’s not worth that”. After that if you agree a price it can take 6 – 12 months to complete the deal. Then there is often an earn out period after the sale is complete.
- Systems and processes: Let’s get straight to the point, the more systemised and process driven your business, the greater the sale price you will attract.
- Step 1: Structure. If you don’t already have clear and recorded systems in place, it will be difficult to demonstrate value in key areas.
- Step 2: Processes. You need to have documented processes in place for all areas of the business
- Step 3: The more the business operates independently of you, particularly around sales and business development, the greater the sale price you will attract.
Full article link here
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