{"id":43156,"date":"2023-10-20T15:26:31","date_gmt":"2023-10-20T15:26:31","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/early-succession-planning-can-boost-business-sale-price-institute-startupsmart\/"},"modified":"2023-10-20T15:26:31","modified_gmt":"2023-10-20T15:26:31","slug":"early-succession-planning-can-boost-business-sale-price-institute-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/early-succession-planning-can-boost-business-sale-price-institute-startupsmart\/","title":{"rendered":"Early succession planning can boost business sale price: Institute – StartupSmart"},"content":{"rendered":"
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Australian start-ups need to focus on succession planning from as early as possible if they want to reap maximum business rewards, says Craig West, chief executive and president of the Australian chapter of the Exit Planning Institute.<\/p>\n

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West says business owners wanting to secure the best price for their enterprise need up to two years to prepare their business for sale and find the right buyer.<\/p>\n

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\u201cIt takes 18 months to two years to exit successfully. If you do it quicker, you\u2019ll leave money on the table,\u201d he says.<\/p>\n

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West told StartupSmart<\/i> that underprepared businesses going on sale would become a growing issue as baby-boomer small business owners reached retirement age.<\/p>\n

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\u201cA lot of business owners don\u2019t spend enough time refining their model. It can be a bit all over the place and that\u2019s hard to exit with much value. But successful companies that sell for a lot are very disciplined on what their business model is.\u201d<\/p>\n

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While West\u2019s top tip \u2013 begin with the end in mind \u2013 is good news for start-ups, there are several steps businesses already operating can implement.<\/p>\n

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\u201cThe biggest issues are the ownership structures aren\u2019t clear, and neither are procedures. So you can\u2019t really sell it,\u201d says West. \u201cThe businesses that sell well are well prepared, with their systems well documented.\u201d<\/p>\n

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According to Biz Exchange, the average business sale is for a multiple of two to three times the earnings of the company.<\/p>\n

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But West believes with proper preparation, businesses can be sold for up to six times their earnings.<\/p>\n

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He says a key issue buyers focus on is talent management.<\/p>\n

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\u201cBuyers want a well-run machine. And a well-run machine doesn\u2019t look like the owner and CEO working 80 hours a week.\u201d West says. \u201cIt also doesn\u2019t look like all your staff leaving after the sale and the buyer being left with a shell.\u201d<\/p>\n

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West says many of his clients have added to the value of their business by taking proactive steps to retain talent by launching an employee share options program.<\/p>\n

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\u201cAn employee share option program means your workers have a stake in the business and the financial incentive to make it work. And from a buyer perspective, that\u2019s huge value.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Australian start-ups need to focus on succession planning from as early as possible if they want to reap maximum business<\/p>\n","protected":false},"author":1,"featured_media":59938,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/43156"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=43156"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/43156\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/59938"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=43156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=43156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=43156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}