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At some stage you will decide to leave your business; perhaps you have decided to sell, retire or do something else. Regardless of the reason, having a succession (or exit) plan in place will help you to smoothly transition out of your business.
You can start succession planning years ahead of time; having a plan can be useful if there is an unexpected event, such as illness or death. Without a plan the future of your business can be at stake. Early planning also helps you to maximise the value of your business.
Make sure your succession plan is realistic and achievable. You may want to discuss it with your business adviser, accountant or lawyer. There are no set rules about what to include in a succession plan, however you may want to include details of:
You can download a succession plan template from Business.gov.au.
If you decide to leave your business to a family member consider the legal obligations, as well as the impact on family relationships.
Consider involving a lawyer or business adviser in discussions with family members to avoid disputes relating to inheritance, ownership or management.
A buy-sell agreement is a legally binding agreement between partners or co-owners outlining what will happen if an owner dies, is forced or chooses to leave.
The agreement will determine:
You may also consider other exit options such as:
Your accountant can advise on the best option.
Once you have created a succession plan make sure you regularly review it especially when circumstances change.
► Learn more about your obligations when selling or closing a business.
► Family Business Australia provides advice for family-run businesses.
► Learn more about finding a buyer or successor for your business.