The sooner you start planning your business exit strategy – the smoother the exit will be. With proper exit planning work, the ultimate exit strategy can change from a sale, transition, merger or retaining the business under management.
And, the exit plan – be it a trade sale, merger or transfer to the next generation – always works better with time and planning. And this is where Westcourt can assist. Our focus on commercially minded families in business gives us a sole focus on creating a business that is capable of sale or succession.
Our typical exit strategy for a business starts with focussing on the underlying business profitability, forward cashflows, and the stability, governance and processes of a business. A well run, efficiently managed, profitable business is significantly easier to sell or appeal to the next generation. So, the long-term planning for the exit of a business with advisory boards, CFO strategy and monthly reports will substantially add to the multiplier effect of a business sale.
Often an exit plan is imminent with a hot sale on the cards. In that case, we have a deep skillset on the tax laws surrounding the taxation on the sale of a business including the small tax concessions, GST impacts and capital gains tax earn-out provisions. And understanding how these tax concessions can allow a family to contribute monies to their superannuation fund and also reduce the excess contributions taxes on that contribution is critical to reducing the long-term tax impact on sale. So, our deep knowledge on the taxation on the exit and sale of a business essentially can allow us to place a large amount of the sale proceeds of a business into your super fund – and avoid the contribution limits that would otherwise trigger extra taxes if breached.
Further, our knowledge of business sales has given us experience and learnings when dealing with other advisors, including data rooms, timing and briefing of legal counsel on strategy. This focus on helping clients with due diligence reviews, financier requirements and tax items on sale contracts – including GST, tax and super warranties and mapping ongoing directors’ exposure – has significantly better financial outcomes for clients looking to sell their business.
Beyond that, family businesses, advisory boards, and family AGM can assist with exit planning by creating rigour over the business governance, evidence that forecasts are robust and have a history of being met. And these governance strategies combined with tax structures including employee share schemes, dividend access shares (in limited instances), flowering shares and employee share loans can make your exit plan a smooth transition that ultimately generates a higher final payment.
Using Westcourt to assist with your exit plan is good business sense. Our proven tax leadership translates into better tax outcomes for your exit plan. We have experience starting a business and running advisory boards for start-ups to national operations. Our global network allows us to create an exit plan for your business that is tax-effective and suited for your family and your family business – so call us today.