Succession Plus use a proprietary 21-Step process to implement a successful strategic succession plan:
Business Succession Planning:
The Succession Plus Process explained
Stage One – Identify Value
Step 1: Goals and Outcomes
Step 2: Fact Find
Step 3: Stage One Insights Report
The first stage of our process is to identify what will be required in terms of retirement planning and financial needs going forward as well as what exists currently in terms of business values and personal assets. Our initial Stage One Insights Report includes a comprehensive review of both business and personal situations to ensure we can maximise the outcome.
Our Stage One Insights Report provides detailed findings and recommendations based on a comprehensive review of your business and includes a unique “reverse due diligence” process whereby we take a fresh look at the business from the same perspective that a buyer might take and analyse the business risk in terms of documentation, compliance, legal, HR and other issues – to ensure the due diligence process does not cause problems with any future transaction. The 50 page report includes detailed recommendations and suggests changes to your existing business structure for ease of operation, flexibility and effectiveness in terms of taxation outcomes and the ability to provide for future transfer of ownership. The report includes a comprehensive financial analysis and scorecard which highlights any area within the business that requires further development or improvement.
In addition we analyse non-financial KPI’s – these are areas of business operations which will have a direct effect on the risk weighting that we provide as part of our business valuation and therefore any improvement in these areas will improve the valuation of the business overall.
As a result of this detailed analysis and a 3 hour workshop to discuss priorities, exit options and owners goals, an implementation plan and timeline is prepared to manage the various projects that result from this detailed analysis. These projects are then facilitated over a 12-18 month period by one of our strategic advisors.
Stage Two – Protect Value
Step 4: Financial Planning
Step 5: Unplanned Events
Step 6: De-Risking
Often we find inappropriate ownership structures which do not protect assets effectively and which do not reflect owners financial planning and lifestyle goals in terms of long term wealth and asset management. Our financial planning process determines the funding required for retirement or after exit and the most appropriate structures to own that wealth.
In addition, our plan needs to manage the risk of unplanned events in terms of accidents, sickness and even death. Our process includes the review of existing risk management and the implementation of legal agreements to govern the outcomes.
Stage Three – Maximise Value
Step 7: Exit Options
Step 8: Strategic Planning Business Model
Step 9: Strategic Financials
Step 10: Systems & Procedures
Step 11: Marketing & Sales
Step 12: Corporate Governance
Step 13: Ownership Thinking
Step 14: Peak Performance Trust
Step 15: Management Succession
Typically our clients work with a senior advisor in order to improve these ratings and therefore increase the valuation of the business so it better matches their retirement planning outcomes.
A dedicated advisor is assigned to each client who will work to review strategic exit options and agree on the most appropriate strategy given the clients timeframe and financial position. This will result in the development of a strategic plan which maps out the strategic initiatives for the business over the next 5 years. They will use benchmarking to identify growth and performance improvements and whilst implementing the key recommendations from our Stage One Report will project manage a restructure (if required) as well as reviewing risk issues including insurances on key people and assets.
Many of our clients have experienced a dramatic improvement in performance through the adoption of an employee incentive plan such as our Peak Performance Trust (a specifically designed ESOP for use as part of our business estate and succession planning process) which is designed to attract, retain and motivate key staff within the business – ultimately leading to an increase in value. Our clients have found also that the Ownership Thinking management model, either dovetailing with ESOP implementation or standing alone, empowers key staff, eradicates entitlement thinking and through a series of Rapid Improvement Plans, shows very real improvement in productivity and profitability.
This process also identifies the most appropriate buyer – a listed company as a purchaser or a strategic sale can often double value.
Stage Four – Extract Value
Step 16: Management Succession
Step 17: Documentation
Step 18: Liquidity Event
This stage involves implementing the agreed strategy, once all of the restructuring and value enhancement projects are complete, to ensure we extract maximum value. Depending upon the most appropriate strategy, this stage will involve transactional issues like legal advice, CGT & taxation and accounting – a project manager will coordinate all aspects to ensure our strategic approach is maintained to maximise the outcomes and ensure they are aligned with retirement planning objectives.
The preparation of a detailed Information Memorandum and Due Diligence documentation is an important aspect of maximising value.
At this stage also, including the benefits of a self-managed superannuation fund strategy is important to ensure (as we move into the wealth management phase) that appropriate structures are used to assist with the transition to retirement.
Stage Five – Manage Value
Step 19: Ongoing Investment Planning
Step 20: Asset Protection
Step 21: Estate Planning
This process focuses on managing the wealth we have been able to extract (proceeds of sale, employee share plan, capital raising, merger etc.) to maximise the performance of passive income, minimise any risk areas, protect assets and utilise the taxation and retirement planning benefits of self-managed super funds.