Demographic changes and issues are frequently in the news these days: the man drought, the brain drain, generations X and Y, immigration- all slogans and headlines familiar to most of us.
And, Statistics New Zealand projects by the mid 2020s one in five people will be 65 andover.
For New Zealand business owners, the changing face of our population has the potential to affect their company's plans for owner retirement, and makes sound succession planning more important than ever.
The majority of Kiwi business-owners are in the 50-plus age bracket, and a fifth are aged over 60. Having been in business thirty or more years, these baby-boomers are starting to think about getting off the treadmill, freeing up time and capital to fulfil other goals.
Over three-quarters of business owners would prefer to exit via a trade sale, claims research from ANZ's Privately-Owned Business Barometer. However, with the average age of the population continuing to rise, many would-be sellers may have trouble finding a buyer.
So, how can you take steps to ensure a successful transition?
* Identify your personal and business goals, and develop a strategy that will enable you to achieve them in a reasonable time-frame.
* Consider other options that will allow you to free up time and capital like private equity involvement or staff/management buyouts.
* Consider a strategy that allows the business to change hands over a gradual period, thus allowing the new owners to benefit from the knowledge and skills inside your head.
Remember:
* A clear and well-established succession plan not only provides you with a path to the future, it also enhances the value of your business to a potential buyer.
