When they start their business, most business owners have a
picture in their minds of one day in the future when they will be
selling or leaving their business and where they want their
business to be at that time.
It may be when they can finally sell off their wildly successful
business for a profit, and head off into the sunset on their grand
retirement adventure, or move onto another new and exciting
Alternatively, they may want to build a great family business, a
legacy they can happily hand over to their children to look after
once they are ready, and take some time to relax, knowing that
their children have a great business they can build and grow.
When you started your business did you think about how selling
your business or leaving your business would work, and what you
could do to ensure you maximised the value of your business?
A client came to us recently with a problem about their family
business. A number of family members were shareholders and
co-owners of the business. There had been a major falling out in
the family, and they could no longer work together to run the
The problem was that because it was a family business, they had
not planned for things to go sour, and there was no documentation
in places as to how disputes would be resolved, how one or more of
the shareholders could buy each other out, or at what price.
Ultimately the matter was resolved but it was an expensive
exercise for each family member and the company which could have
been avoided or minimised if the right documentation had been in
place at the start.
As a business owner...
What plans have you got in place to protect your business and
its value, and to make sure that you will be able to sell or
transfer your business with the least amount of difficulty and the
most gain when you are ready to leave?
Will your business actually be worth anything without you at
Or will you be trying to sell an asset that is just an empty
shell without you?
Have you got the relevant documents in place for your business
to operate smoothly, including employment contracts, premises
leases, supply agreements, insurances and details of your wishes
where an unforeseen event occurs?
It is essential that you plan these aspects of your business to
ensure that when you are ready to leave, you can maximise the
profit you will be making from your business, with the minimum
amount of cost and restructuring required to transfer the business
to a new owner, whether a third party buyer, or your children.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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