Holistic View of Succession - Succession Plus

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Holistic View of Succession


Holistic View of Succession

By , March 28, 2009

We have seen a number of clients in recent times who have benefited greatly from a holistic approach to their business succession planning needs – this simply means it is not good enough to look at the company or the business in isolation. It is extremely rare to find a small to medium business owner whose affairs are so well-organised there is little or no crossover between the business and personal assets and liabilities. For example, often guarantees are given over personal assets to secure business debts and often personal income or savings are used to support business cash flow in times of need. All of these normal relationships between owners , their businesses and other entities like family trusts or self managed super funds make the overall structure far more complicated and greatly increase the importance of considering all those aspects when designing a succession or exit strategy.

Often as our business grows we make decisions based on current circumstances with very little consideration for the eventual exit strategy we intend to employ – this means when we get to a point of exit our structure is not quite appropriate or there are inter entity transactions / relationships / loans etc that are difficult to unwind and certainly cannot be passed on or sold to new owners as we exit the business. I have seen several businesses recently whereby the owners have purchased property within the trading entity including one company that owned a winery as an investment within the trading company. All originally done for very good reasons but at the point exit or sale of shares in that particular entity to a new owner those assets need to be unwound.

Due to the recent changes in self managed super fund legislation there are some interesting planning opportunities available as long as we take a holistic approach and look at the total spectrum of the business owners world, including the business, when we design a strategy. This can often be used to great effect to minimise taxation and maximise our wealth creation strategy post our exit from the business.

Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.