Login
iscover
Succession planning isn’t only smart to ensure a business thrives in its next phase, it also helps owners maximise value when it comes time to step away.
Andrew Johnson, managing partner of AJ & Co Lawyers in Brisbane, Sydney and Melbourne, advises clients that it is never too early to start succession planning.
Speaking at Professionals’ annual PRO-Elite event in Hobart last month, Johnson explained that laying the groundwork for a leader to hand over the reins is not only an integral part of retirement planning, but it also comes into effect in unforeseen circumstances.
“Even if retirement is not on your horizon, life can present unexpected turns,’’ Johnson said.
For operators who are self-employed, as many real estate office heads are, succession planning becomes particularly important to allow for a comfortable level of living when a full work schedule is no longer possible.
That might mean putting certain structures in place now, depending on a leader’s plans for the future.
“An agency may be sole trader, partnership or family trust that all require different processes.
“Developing a transition plan is time-consuming but worth it to ensure you receive the right value for one of your biggest assets, your business. You worked hard to grow it and your goal is for it to prosper long after your departure,” Johnson reminded.
He outlined seven integral steps to putting a business plan in place to ensure a successful leadership handover for all parties involved, namely:
- Identify a potential successor – family, business partner, staff.
- Understand your accumulated assets.
- Raise income streams, i.e. boost property management payroll.
- Pay down your mortgage, retire business debts.
- Review superannuation options.
- Seek advice on tax implications – payroll, capital gains.
- Improve operational efficiency – administration, client marketing, CRM upgrades.
Speaking to advisors, he stressed, is integral to placing a business in the best possible position when being sold or transferred to new hands.
“Getting the right advice helps you to structure your business now for operational improvements, identify any risks and compliance requirements, minimise tax implications, while ensuring the transition is as smooth as possible for yourself, family, staff and clients.
“With advice and planning, you can protect your future and build on your legacy,” Johnson said.
Katherine Gonzalez-Cork, CEO of Professionals, said she feels that succession planning is “a conversation that the industry doesn’t do particularly well”.
It can be a hard subject to broach, and for some, involve family members and longstanding staff in financial conversations that need to be handled delicately.
Professionals takes a transparent approach to the process, and facilitates putting plans in place however the network can.
“At Professionals, it’s a discussion we encourage with our members even if it might be a plan to enact five or 10 years ahead,” Gonzalez-Cork said.
She noted that the strategy has resulted in many businesses staying with the brand for multiple generations throughout a family.
“Some of our offices are second and third generation with entire families involved, so planning is crucial to maintain these valued businesses,” the CEO said.
“The network wants to nurture and keep all our current offices while we work to expand with our ambitious plans for growth.”
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
Newsletter
