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Part 1: In small business, planning is the key to your financial independence.

11.09.2016 by Neville Hughes

Over the next couple of months, I am going to write a lot about the importance of succession planning.

Small businesses, especially those operating in regional locations across Central Queensland need to have clear succession plans in place in order to help them achieve financial independence.

With the tough economic climate in Central Queensland’s, the time to plan for your future is now, not later.

The scary statistics prove my point

One alarming statistic shows that the average age of the small business owner is 57 years of age (and yes, I fit perfectly into this category!).

Some other scary statistics include:

  • According to the HSBC’s future of retirement report, 45% of business owners have not prepared adequate funds for their retirement.
  • According to the , 76% of business owners are not familiar with all the exit options that are available to them.

And the trends are even more concerning

Given these statistics, it is nothing short of ironic that the following trends have been revealed such as:

  • 76% of business owners plan to transition over the next ten years (myself included!)

YET

  • 66% do NOT have a formal succession plan in place.

So with that in mind, try to get your head around this one…

Just because you want to sell and you’re ready, doesn't mean your business is going to ‘fly off the shelf’! In fact, even if you do sell, you may wish you hadn’t within a few months!

  • 80% of businesses put on the market do not sell, and
  • 12 months after selling a business, three our of four business owners, yes that’s 75% of them “Profoundly regretted their decisions.” (2016 State of Owner Readiness Survey E)

So where to next now that you know this information??

Well I think it’s obvious from these figures that you simply can’t assume that your business will magically sell for the amount you NEED it to when you WANT it to.

Quite simply, if you do not plan for succession, your are putting yourself in a position where there is a very real change that you could be in that dreaded 80% that don't even sell!

So that leads me to what I plan on writing about over the next few weeks.  I will be answering your questions, and also asking for your commentary and experiences also. 

 

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Subscribe to my blog to get the weekly updates direct to your inbox and if you would like to have an chat about what succession planning might mean for you, give me a call or email me at Neville.Hughes@gtcfin.com.au

 

 

 

 

Topics Business Planning

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