Succession planning for small businesses

Retirement is a big commitment and even more so for those who are self-employed or run their own business. All the factors that go into the decision to retire are magnified with a business to consider. Selling or closing are not the only paths if you choose to move on, this is why succession planning for your business is a great start for you to see where you want to go. For business owners, planning for your business’s future can be the key to its survival after you leave.

With the succession planning process, you will need to set ultimate goals, such as what you want to happen to your business, if you still want a role and what would it be, who should run the business in the future and when you want to leave. To make the best plan for you and your company, know all your assets and liabilities. This will help to value your business so you can calculate shares or a sale price. Having a timeframe and early planning will make it easier to leave comfortably when the time comes. Professional advice at various stages of your planning and exit will greatly help with your strategies as well as documenting your plans, having key decisions written down for advisors or successors to easily access.

Everyone’s retirement needs are different, with no official retirement age in New Zealand, super can start being collected from age 65 in conjunction with you continuing to work part-time or having a smaller role in your business. If moving on completely isn’t for you just yet, you could decide to keep a stake or shareholding to give you an income in retirement. Alternatively, you may decide to still offer advice in a director or consultant role. If this is the case, you and your successor will need to have a discussion about how this process will work. Whatever option you want to go with, seeking professional advice will help you make informed decisions.

Posted on 8 March '19 by , under super.