Succession Planning

Turning great staff members into business partners

Situation

Ben, as the the owner of a long-standing successful family business was looking to develop an exit strategy, maximise the value of the firm prior to sale and enjoy a comfortable retirement.

Need/Event

As an alternative to a trade sale Ben realised that on his team were several highly valued staff members who contributed well to the success of the business. Losing them would be a major blow as it would be difficult to replace their attitude, work ethic and experience.

In addition, Ben was planning to increase his time off to start enjoying life after several decades of building a very successful business, however he wasn’t ready to step back fully just yet. Ben also knew that having a working succession plan in place would remove one of his major concerns through knowing his transition into retirement would be more assured.

Approach

The DAB Financial Group appointed a dedicated Client Manager to spent time with Ben to understand his personal lifestyle goals and how they could start to be given a higher priority in his life.

The Client Manager then orchestrated the specialists within the Group to maximise the outcome for Ben while remaining as the singe point of contact to ensure the best possible outcome.

The DAB Accountant advisor detailed the current financial health of the business and recommended changes to make it attractive for an equity buy in by senior staff whilst ensuring that Ben would still be able to substantially control the business.

DAB Legal developed a compelling shareholders and option agreement for the incoming shareholders whilst realising fair value for Ben.

Ben was then introduced to the DAB Financial Group Wealth Management adviser who recommended a prudent investment approach of the share sale proceeds to build passive income and a comfortable retirement in coming years using both superannuation and alternative investment strategies.

Results

Ben was able to start enjoying his love of golfing, fishing and increased holidays with his family whilst still being substantially involved in the business. He was able to continue to draw in reasonable dividends as he continues to progressively sell down his share in the firm thereby building his retirement nest egg over several years.

His key staff members, now minor equity holders, are now unlikely to leave the organisation. The size and value of the company continued to grow as Ben’s senior staff helped drive the business to even greater success as their owner mentality created an even greater sense of purpose and motivation to take the firm to new heights.

Ben has increased peace of mind knowing the future of the business was assured whilst increasing his certainty of a comfortable retirement.