Craft brewing is an industry that has been fuelled by passion. Too often the idea of exiting a business is the last thing on the mind of a brewery founder during the exciting foundation phase.
As recent history has shown, as businesses grow and evolve, founder’s fatigue can set in, retirement or family issues call, or owners simply want a new challenge, the problem of what comes of the business becomes a huge challenge for brewery owners. In worst cases, it can see the end of a business rather than an orderly handover.
To ensure the founding passion, as well as the blood and sweat invested in the business doesn’t end in tears, succession planning toward a preferred exit in mind is vital for brewers, almost from day one.
Leading businesses advisors HLB Mann Judd provided this introduction to the basics of succession planning.
Business Succession Planning
Preparing for change can be challenging. Effective succession planning is critical to the ongoing success of your business. A strong future needs careful planning, and your succession plan is an essential part of your overall business plan.
What is succession planning?
Succession planning is handing over power to a new generation. Even if you wish to eventually sell your business or pass it onto a family member, you will need to have a succession plan.
Choosing a successor?
Firstly, you will need to identify a likely successor with the right skills and who wants to take over your business. This could be either a family member, employee, business partner or outside buyer.
What to include in a succession plan?
Generally, your succession plan should address financial, tax, legal and operational considerations in relation to your exit from the business. Details will be different for every business, but you will need to ensure your succession plan is achievable and measurable.
Valuing your business?
Importantly, you will need to value your business. Understanding how much your business is currently worth will assist you in your succession planning and determine what you will need to do to get the business ready for your exit.
Implementing your succession plan?
The success of your succession plan depends on setting a realistic timetable to meet key milestones and effectively communicating these to ensure that everyone involved are on the same page. Develop a timeline that highlights the transfer of responsibilities and identifies the key milestones.
Like any good plan, you should regularly review your succession plan and update it to include any changes to your business and circumstances.
The first step to developing a succession plan is to start the conversation. Stepping back from your business can be an emotional and difficult experience, so having clear goals and timeframes can help you to let go. It is also important to consult a professional when you are developing your succession plan.
At HLB Mann Judd, we provide tailored succession planning advice and have professionals across a broad range of specialisations such as business advisory, tax consulting, valuation services and wealth management to help you develop the best succession strategy for your business and personal financial future.
Our team of advisors can help structure your succession plan so that you can grow and future-proof your business for the next generation, but at the same time fund your retirement and ensure a smooth transition. For a free, no obligation consultation, please contact James Henderson or Chew Mar on (07) 3001 8800 or by email at [email protected] or [email protected].