PWC Business Barometer – key business succession & exit planning
Based on our review of the PWC Business Barometer and the key issues surveyed relating to business succession planning the following key points can help show why succession is such a big issue for business owners :
For those owners looking at an exit in the next 2 years 27 % expect to sell to a competitor and 19 % to a third party. Interestingly 17 % ( up 6 % from a year ago ) are looking to sell equity to current employees. And yet still 54 % have no succession planning / handover or exit arrangements in place. Given the time frame this process takes this is the same as saying you are going to auction your home but never appointing an agent and marketing the property.
The questions posed by the report are perfect for business owners:
How can I achieve maximum return on the investment I’ve made in my business, while ensuring the new owners – be they family, employees or external to the business – are positioned to unlock its potential for further growth?
What succession planning, handover or exit arrangement can be put in place now to ensure my business continues to grow when I leave ?
12 % of business owners now intend to put in place some kind of Employee Share Option/Ownership Plan – ESOP ( a plan whereby employees own equity in the business ) mainly to position the business as a more competitive employer and attract and retain key staff. ( 50 % said securing the right talent / finding competent staff was the number one issue ) and retaining them was also highly ranked with 16 % . In our experience with clients both of these outcomes can be delivered via an effectively designed ESOP.