Only when the tide goes out, do you discover who's been swimming naked

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Only when the tide goes out, do you discover who’s been swimming naked

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Only when the tide goes out, do you discover who’s been swimming naked

By , December 17, 2020
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Only when the tide goes out, do you discover who’s been swimming naked. – Warren Buffett

2020 has certainly been an unusual year – but like many other years in history, there are themes and learnings we can apply to what might happen going forward. For example, for several years after the GFC, there was a heavy concentration of activity for mid market mergers and acquisition – some companies which had survived, and even prospered, during that period had cash reserves and an appetite for growth through acquisition. Others who had done less well and perhaps been caught out by the severe shock were forced to take more drastic action – either restructuring or even selling at a reduced price.

COVID19, like the GFC, has forced business owners to act – they have had to take action to either ensure survival, pivot to a different way of delivery or even a different product. Others have had to decide to exit, sell or close their business.

We have also seen a substantially increased focus on employee engagement, for people who had teams working from home “unsupervised” they were keen to make sure those employees were connected, engaged, and motivated. The strategy to introduce employee ownership works well in most businesses, with the owners seeking to engage employees and encourage them to think and act like business owners, with all parties benefiting from the improved performance. In difficult times, employees need to fell part of the team.

2021 will also be an interesting year – some countries (including Australia thankfully) have managed COVID very well and are already in recovery and growth mode. Others are struggling with COVID still increasing and lockdowns in place – they are only waiting for a vaccine before they can enter growth mode again.

The key lesson here is to think strategically, plan for the long term and ensure your business and your finances are well-managed, strategically planned, risks are mitigated, and you are well-placed to take advantage of whatever opportunities arise in the next 12 to 24 months.

For those who have taken the hard steps in 2020 and prepared well – this is often the best of times to set up for the next ten years.

"Predicting rain doesn't count. Building arks does. - Warren Buffett"

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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.

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