Topics in Exit & Succession

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The Exit Process

How will ownership be transferred?

How much? (Transaction value & net proceeds)

What will be the timeframe?

What needs to be done to achieve the goals?

Shareholder life after exit plan?

What is Exit & Succession Planning?


Exit Planning refers to the process of helping the business owner(s) leave or exit the business and ensures that a successful transition of ownership will transpire in a timely, efficient and effective manner.

The goal in most cases is to maximise the financial returns to the business owner, however in cases of family succession this may be secondary.


Two types of plans need to be prepared in order for a business owner to successfully leave or exit the business

Personal Goals & Action Plans


The personal goals of the business owner(s) must be taken into account and plans must be made to ensure that “life after transition” goes smoothly.


Personal financial planning and tax planning will need to be considered to ensure the maximum net proceeds and transfer of wealth.


Business Goals & Action Plans


The business value of the enterprise needs to be maximised prior to the transition. This will ensure that the business owner(s) receive the maximum return on their investment.


Plans must be put in place to transfer the management roles and responsibilities that were previously performed by the business owner(s). (Management succession).


If a management succession plan is considered at least 12-36 months prior to selling then it is likely that internal structures will lower the risk of failure of a new business owner. This will ultimately increase the value of the business.



Why prepare an Exit Plan


Why would you prepare an “Exit, Succession or Business Owner Retirement” Strategic Plan for your business.


No matter how much you enjoy working in your business, inevitably there will come a time when you will need to retire or sell your business.

A business owner can retire in several ways. Each has implications, not only for you as the owner, but for the business and the business adviser. An Exit & Succession plan will help you to consider a variety of different options before you make the final decision. In order to retire from the business the business owner can choose to:

sell the business

transfer ownership and control of the business to family members

allow the business to cease – particularly if the business is small and closely tied to the owner's personal involvement

retire from active involvement (or scale down involvement) by taking a new partner or appoint a manager.

allow existing partners or family to run the business and maintain a passive involvement

Each option has its merits and drawbacks. However it is essential that any decision regarding retirement be made early so that death or infirmity does not force an unfortunate decision on the owner or the owner's family.

Most business owners are only concerned with selling their business to a third party. Therefore the primary driver for preparing an Exit Plan is to maximise the value of the business in this sales process.

Common Problems

To ensure you get the best price for your business if you decide to sell, you need to start planning for such a sale well in advance. You also need to consider the issues that could cause you problems.

Common problems at the start of the process.

Most business owners feel their business is worth more than is justified by the marketplace

Most business owners books and records may fail to reflect the true worth of the business

Most business owners have backdated compliance and financial statements

Most business owners have little systems and processes in place

Most business owners have never reviewed their business from an “attractiveness to a buyer” perspective so there are fundamental problems that will drag the value down

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LEGAL ADVICE : J R Peterson lawyers



Exit Planning Quiz

This quiz will give you a score out of 100 on how attractive your business is to a potential purchaser.


It will also include some tips and suggestions on improving the value of your business. Contact your Business Advisor or enter your details into the contact area on the HOME page of this Ebook series..



Exit Planning Software

If you want to understand the Exit & Succession planning area better then you should review the Selliz Pro software that MAUS Business Systems publishes. This has a series of videos as well as structured plans, checklists and valuation calculators.



Getting Ready Software

The more systems and solid management processes that you have in place the more valuable your buisness.


MAUS also publishes a whole rane of management software such as

Policies & Procedures,

Business Planning

HR software.

KPI Scorecard

Quality Assurance and more


All products are extremely reasonably priced and designed for Small to Medium sized businesses.