Planning for the succession of a business is an important and sometimes overlooked part of a business plan. It’s an inevitable period in the lifetime of all successful businesses – so it’s best to weigh up the options early.
The most obvious progression is to keep your business in your family. This option should involve careful planning as there are a number of issues to consider, including:
Choosing to sell your business to your management team or your employees can be a positive for all parties – there will be continuity for your business, and the loyalty and hard work of your staff will be rewarded.
The crucial question is: Are any of your staff members interested in taking over your business?
Your business legacy will likely be in good hands if you have dedicated staff who believe in the brand and the business, but there are other considerations such as:
Your business partner might be the logical choice to acquire your share of the business. However, there are both positives and negatives for selling your business to your partner.
On the downside, your business partner will have a strong bargaining position perhaps not agreeing with your preferred selling price.
On the positive side, your business partner has an ongoing interest in seeing the business continue and prosper. They also already know the business, how it works and what makes it tick.
If you’re hoping to remain a passive investor (or simply want your business’s legacy continued), then this option might be the best for you.
If you’re going to sell your business to investors or other companies, your industry will dictate the number of potential buyers. It might be a challenge finding a willing investor to pay what you want and within your preferred timeline.
There are often two types of investors, namely:
There are some businesses that naturally work as franchises – where the original business is replicated multiple times but with different owners and royalties paid to the original owner.
Franchising your business involves plenty of forward thinking. You’ll need time to:
Following expansion, you may find yourself in a position to sell your original branch, to live off the royalties into retirement.
Enter your details below and sign up to our course, which also includes FREE template to help you plan your strategy.