You may be ready to take a holiday, already be on holiday or just plain day dreaming – we have all had those thoughts – how good would it be lazing on that beach and not have to come back to work next week, or the week after or the week after that…. Yes retirement is on the horizon at some stage for all of us…are you ready? When should you start preparing? What will happen with your business? Bring on the succession plan!
Travel agency businesses are generally quite a marketable business to sell, so your business may already be in a shape that can easily be moulded for sale. If not it is even more important to start working on your succession planning strategy now. A good succession plan will help your business transition smoothly to a new owner. By thinking and planning about your exit strategy sooner rather than later you can maximise the value of your business and maximise your retirement travelling opportunities!
a. History and successes of business.
b. Organisational chart and experience of key employees.
c. Key suppliers.
d. Key customers.
e. Documentation of administrative procedures.
In considering and implementing the succession plan, business owners often find identifying the successor of the business the most challenging. Here are a few options:
Grow your own successor – This option works exceptionally well in many business, including travel agencies. You likely have one or more talented staff on your team with passion and drive for the industry and your business. Is this person interested in business ownership, have you talked to them about their options and opportunities? The benefit of this type of succession are many – you can start implementation of your succession plan early giving the best opportunity for a smooth transition, your customers are likely already dealing with this person, they will already have a good relationship with your team and they know and understand the business.
Merge before exiting - this option can work well but needs to be carefully implemented. It is important that you carry out proper due diligence of the firm you are merging with to ensure that you are culturally aligned, which is critical for both customers and your team. Being in the industry you may already know of other agencies in which you may have this cultural alignment. Depending on any pre-existing relationships it can be best in the initial stages to engage the services of a broker or business consultant who can commence confidential discussions without revealing your details until identifying serious contenders.
Sell the business closer to your exit – while this can certainly be the easiest option for you to sail into the sunset, there is still likely to be some work-out required by you in a transitional period. If this is an attractive option for you; documentation of business processes, suppliers, customers etc. is critical and will add value to your business in sale.
Regardless of which option you this is right for you, getting the right advice is critical. Your accountant will understand your business and your objectives and will be able to help you every step of the way.
The easiest way to get your succession plan into action is by simply getting started – what are you waiting for, your travel dreams await!
There are DFK ANZ accountants and business advisors right across Australia with significant succession planning insight and expertise for you to access. Call 1300 DFK ANZ to book your complimentary Strategic Business Review as an AFTA Member. An honest and constructive conversation about your business is waiting for you.
Kirsty began her career with DFK Crosbie as a trainee in 1993 and became a Partner of the company in 2004.
Her experience covers a vast range of industries including registered clubs, non-profit organisations, professional services business, and manufacturing and her specialties include external auditing and consulting services to registered clubs, audit of non-profit organisations and private companies, financial reporting and strategic planning.