According to an article published today on mybusiness.com.au, half of SME owners have no plan in place to exit their business, potentially paving the way for broken dreams and financial hardship later in life.
The article states that the recently released ‘Australian Financial Savviness Whitepaper’ by Mortgage Choice found that 53.3 percent of SME owners have no succession plan in place. This was despite more than half (56.7 percent) admitting that the profits from the eventual sale of their business would fund their retirement.
“This is an alarming figure but it does not come as a surprise,” said Mortgage Choice CEO John Flavell.
“Small business owners are notoriously time-poor and they have to deal with many immediate issues in order to successfully manage the day-to-day operations of their business. As a result, planning for the future often takes a back seat. But the reality is, no one can predict the future and sometimes things happen that will affect the future trajectory of a business.”
According to Senior Business Coach Keith Collins, this is exactly why planning is so important for SME owners, and it is imperative that they take time to work ON their business rather than getting stuck working IN the business.
“A business will only be of value to fund your retirement if you have the systems and structure in place to ensure it can run successfully without you…. And that is regardless of whether you are selling or passing down through the family” said Keith Collins. “You do not want to be in that 53% with no plan and a business that you can’t sell to retire.”
At Action Centre there are 4 main steps that we help our clients put in place when it’s time to prepare for their big exit, which are:
1) Set your Exit goals and PLAN!
Before you begin it is important to understand what the dollar figure is that you want and to set your date to exit. You then need to create a business plan to ensure there is growth in the business.
2) Turn your knowledge into trainable systems
We help our clients extract their years of knowledge and turn it into trainable systems, that will scale the business up and continue to succeed without them. These processes and systems will ensure the business is as successful in the future as it has been in the past.
3) Recruit the RIGHT people
We show our clients how to recruit the right people through proven and tested personality profiling, ensuring the business is left in the best hands when they sell, or allowing the next generation to build upon their legacy;
4) Scale up and Grow
This is the key part of the plan - we show our clients how to scale the business up, grow and maximise profit to get the best possible result when they sell or divest. This involves diversifying their customer base, improving revenue, avoiding too much commoditisation and then maximizing the amount they get in the sale.
There are many reasons a business owner may want to exit the business, and if you could use some advice on how to get there contact us below at Action Centre for an obligation free chat.
You’ll find having an Action Centre business coach is just like having a marketing manager, sales team leader, trainer and recruitment specialist - wrapped in one - all for one nominal investment. We are the business partner you need without sharing your profits - with over 60 years of collective coaching experience to keep you on track and accountable for your own success.
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