Smart business owners are spending more time on their succession planning. Their business represents a valuable asset and effective succession planning will maximise the value of that asset and the capital that can be realised from it. But what happens if something happens to the business owner, a partner or key director? Death, trauma or critical illness, all trigger an ‘unplanned succession’ event. Any one of these events can change the profile of the business and drastically affect its value. Even where the disruption to the business can be managed, how do you fund the unexpected need to buy out a partner or shareholder? And, how can this can be done in the most tax effective way, providing certainty for all sides and removing the risk to the business? FIND OUT MORE
Tag Archive: Business strategy
Unplanned succession: How to make sure your business survives you
What is business goodwill?
In general, there are three main types of goodwill: corporate, personal and location. You may have one or a mix of these. Different types of goodwill have different values. Typically corporate goodwill is the most valuable. Let’s have a look at each:
Corporate goodwill is the value items such as brand, business presence, an excellent client database, and repeat customers add to the value of the business. When we talk about a brand, we are talking about something that is recognised, not just a logo. For example, if a potential customer needs to buy a product that you sell, is your brand the first one they think of? This type of brand value can simply be relevant to the area you operate within. FIND OUT MORE
What value is right for you – understanding valuation methodologies
Not all businesses are valued in the same way. In fact, there are over twenty different valuation methodologies. And, applying different methods will not produce the same result. To know what your business is really worth, you need to identify the most appropriate valuation methodology to apply to your business. FIND OUT MORE
Don’t let the tax man be your valuer
How one company ended up with a five figure tax liability after the ATO became their valuer.
Last year, a company, who completed an internal restructure, received an amended tax assessment from the ATO. The transaction that triggered the amended assessment was an internal one and even though no money changed hands, the restructure resulted in a capital gains tax event. The taxpayer had relied on the CGT small business concessions to overcome their tax liability. FIND OUT MORE
Who will buy my business?
Likely buyers will vary from business to business. Areas that will influence the buying pool include the industry sector, size of the business, degree of complexity of the business, and purchase price. Your buyer may come from the broader market or alternately your business may be attractive to a competitor, one of your suppliers, someone working in the same customer channel, or even your own management team. FIND OUT MORE
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