Many businesses, particularly small to mid-sized businesses, rely heavily on one or two key individuals for the business to operate.
These individuals are often the business owners and they may be reluctant to delegate control and decision making for a variety of reasons.
Whatever those reasons, the result is centralised decision making, knowledge and experience, which are not easily transferable in a business sale.
Ultimately, of course, that impacts business value – and not in a good way!
In this video James explains how business value can be eroded when the majority of knowledge and expertise is held by one or two key individuals.
If you are an owner in this situation, one way forward is to proactively build a team which can operate without you – i.e. develop a succession plan.
Separating your business’ value proposition from yourself, or even making the business less dependent on you or a small number of family members, means the value is often more easily transferred to another party, potentially putting more dollars in your pocket and creating an easier transition process when it comes time to sell.
You can start by downloading our free Business Succession Scorecard to rate your business' preparedness for sale or succession.
If you would like assistance with succession planning for your business, contact the team at JPAbusiness on 02 6360 0360 or 02 9893 1803 for a confidential, obligation-free discussion.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.