Hire and Rental News - February 2017

18 / 68

18 HIRE AND RENTAL NEWS • FEBRUARY 2017
Then succession planning must be
something for those in their 60s, right?
For males born around a century ago
(1901-1910 to be precise) the average life
expectancy was a mere 55 years. Life
expectancy for males born a century later
is around 80 years. Now, full of energy
and wisdom, the business owner has a
new zest for life!
So we turn to those in their 70s and
octogenarians. Are they ever going to
let go? Are they invincible? Do they
intend to die at their desk? Amazingly,
we meet a few who believe exactly that.
Having undertaken literally hundreds of
succession planning projects over the
last few decades, we have heard all of the
stories, and plenty of the excuses:
• There is nobody who can manage this
place when I am not here.
• I have never been healthier and I
already have insurance (of some sort).
• Who is going to take over? One of my
kids is a lawyer and not interested,
and the other one already works in the
business … and they can’t possibly
do it!
• I don’t know what my business is
worth. Who would buy it anyway?
• Maybe I should just find someone to
run it for me while I go off to France to
live off the dividends?
Sounds crazy, but these are commonly
heard statements. The problem is
Succession … putting it off is much easier!
By Richard van der Merwe and David Hinchey
When a business owner is in their 40s surely it’s way too early for them to contemplate
the future of their business, family and wealth? Too many other demands on valuable
time and resources? If your 50s represent the best years of your knowledge, skill, growth,
rewards and authority, it is obviously too early to contemplate succession! At least many
business owners believe so.
underlying each comment is a myriad
of complex circumstances. They form a
puzzle that is often impossible to solve
objectively in the head of the business
owner alone. So putting off any form of
planning becomes an easy option!
However:
• Owners do get sick and sometimes
suddenly die on the job (yes, we have
had a few over the years).
• Without a proper management
structure the business is usually
hopelessly owner dependent - this
makes an otherwise profitable business
significantly lower in value.
• There are lots of alternate futures
for the ownership of the business,
including children, relatives,
management, competitors, trade sale
or even IPO. However, finding your
future owner and grooming your
business for sale can take many years.
Surprisingly frequently, a buyer might
just knock on your door. However you
may not be ‘investment ready’. The
opportunity may slip between your
fingers if you have not undertaken some
form of succession planning.
Fordham has developed a planning
process to address issues relating
to clients’ future plans. We help to
identify and prioritise issues and
clarify their vision for the future. We
determine specific tasks which should
be undertaken
to maximise
the success of
the process. We
document this
process and provide
a subsequent
report.
Extracting issues
encompasses
such factors
as: income tax
planning; corporate structures; Capital
Gains Tax; asset protection; building
wealth outside the business; retirement
planning; investment management;
estate planning; life after business;
intergenerational wealth planning; family
office; philanthropy.
Naturally, we encourage all our business
owner clients to take succession planning
seriously. Ironically, the side benefits on
the business performance, profitability,
accumulation of wealth and improved
lifestyle can be a very pleasant side
benefit!
Contact 03 9611 6066 or visit website:
This article has been prepared by Fordham Business
Advisors. It is general information only and is not
intended to provide advice or take into account
objectives, financial situation or needs. To the
extent permitted by law, no liability is accepted for
any loss or damage as a result of any reliance on
this information. This information is believed to be
accurate at the time of compilation and is provided
in good faith.
James Moran the General Manager
fromApprenticeship Support Australia
presented at the HRIA NSW State
meeting on 10 November at the Artarmon
branch of Kennards Hire.
HRIA and Apprenticeship Support Australia
Traineeships and apprenticeships apply
to a range of roles from traditional trades
through to office roles, drivers and general
yard hands.
The presentation with all the information
you require about taking on an apprentice
can be found on the HRIA website in the
members’ section information sheets.
Contact: 1800 620 391 or visit website:
The HRIA has teamed up with Apprenticeship Support Australia to promote careers in the
hire industry and make it easier for hire companies to find and recruit new staff.
Richard van der Merwe
INDUSTRY in FOCUS