Why you need a documented succession plan
Handing over your small business to a successor takes considerable time and effort. Here's why you need a succession plan to help you do it.
Small and family businesses have been the backbone of the global economy for decades. In Australia, small and medium-sized enterprises (SMEs) make up about 70 per cent of all businesses – about half a million – and employ about 50 per cent of the workforce.
New ESOP recommendations remove barriers for small business
In August, the House of Representatives Standing Committee on Tax and Revenue tabled its Owning a Share of Your Work: Tax Treatment of Employee Share Schemes report, recommending changes that have key implications for the small businesses considering an Employee Share Ownership Plan (ESOP).
An ESOP is a mechanism to allow employees to own a share of the company they work for. They can be suitable for both private and public companies, large and small.
SME valuations hit record high of $1.4 trillion in June with more businesses looking to sell
Small and medium business valuations hit a record high of $1.4 trillion in June before the latest wave of COVID-19 lockdowns hit businesses across Australia, fresh data from Australia’s biggest succession planning advisory firm shows.
New research by Succession Plus found the total value of Australian SMEs was $1.437 trillion at the end of June, or an average of $605,079 per business. And while owners sat on record values for their businesses, many were looking to sell, with listings up 5.86% since the previous quarter.
Australian digital platform launches in North America
A local digital platform has expanded to North America.
On Thursday, Australasian business succession and exit planning advisory firm, Succession Plus, confirmed the news and said that the Capitaliz platform will help North American advisers “unlock untapped value for small to medium-sized businesses”.
Capitaliz enables automatic businesses automation, benchmarking and value enhancement guidance for advisers to deliver successful exits for their clients.
Australian digital platform launches in North America
A local digital platform has expanded to North America.
On Thursday, Australasian business succession and exit planning advisory firm, Succession Plus, confirmed the news and said that the Capitaliz platform will help North American advisers “unlock untapped value for small to medium-sized businesses”.
Capitaliz enables automatic businesses automation, benchmarking and value enhancement guidance for advisers to deliver successful exits for their clients.
Estate planning not just for clients
One of the few positives to come out of the COVID-19 pandemic is that the feeling of uncertainty has led people to address setting up or updating their estate plan which otherwise would have fallen into the “I’ll get to it later” basket.
While financial advisers should be discussing estate plans with their clients, they should not forget about their own estate plan either especially if they own their practice.
Employee Share Schemes, Founders & gin
The House of Representatives Standing Committee on Tax and Revenue has today presented its report titled Owning a Share of Your Work: Tax Treatment of Employee Share Schemes. The Committee’s overarching recommendation is that Employee Share Schemes be treated as capital for the purposes of taxation, and that a tax liability would arise on the disposal of the assets granted, using the current capital gains tax regime. Succession Plus CEO Craig West takes us through it.
Lockdown lowers adviser business valuation
Australian lockdowns are likely to send a recovering financial adviser mergers and acquisition (M&A) market into reverse as owners realise the lockdown will negatively impact their business’ valuation.
Younger staff sets firms up with succession planning
Firms seeking to put a succession plan in place would benefit from hiring younger advisers who will be at the firm for the long-term.
As many advisers left the industry, this was creating gaps that needed to be filled but there was a lack of suitable advisers available. This meant there were opportunities for younger advisers or graduates who were seeking their first role.
Let’s Talk: What is the best business advice you ever received?
“Begin with the end in mind, from The 7 Habits of Highly Effective People by Dr. Stephen R. Covey (habit #2). This means making sure each and every decision you make in business gets you closer to your endgame.
“The people you employ, the business model you adopt, the financial strategy you map out and the way you market and promote your product, your pricing model, your client service and delivery – all need to focus on the endgame. If you look at a decision that is taking you further away from that, it is the wrong decision.
Government releases new draft legislation for employee share schemes
The Australian government has released exposure draught legislation proposing tax and regulatory changes that will make it easier to implement ESSs.
Employee incentive schemes (ESSs) are used by employers to attract, retain, and motivate employees by issuing shares, share options, interests in shares, or other benefits resulting from shares.
Succession Planning on the Business Excellence Podcast
Australia has a large number of baby boomer business owners that are currently heading towards or preparing for retirement with no real plan for an exit from their business.
The first thing to do is begin with the end in mind, start to think about – what does my exit look like?
