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Business succession planning for small business

The day-to-day running of your business can mask the need to plan for the day you’re no longer running the show. Whether you decided to retire or sell it’s important to invest some time to create a business succession plan or exit plan.

Plus, it’s also sensible to cover your business should the unforeseen happen and you’re no longer around to manage the business.

Plan to succeed

Planning for the future for your business is very important and should be something that’s regularly updated. A business succession plan will enable your business to deal with unforeseen circumstances or emergencies as well as the orderly retirement of business owners or leaders. Here are some considerations for your business success planning process.

The plan should cover your finances and insurance arrangements. There’s also estate planning to cover and this includes death benefits and superannuation details. Remember to note any beneficiaries who can receive your super. Then there are the possible tax consequences of a super death benefit payout that needs to be taken into account.

Succession planning consideration


  • Structure – sole trader, partnership, company or trust
  • Type of succession – full or partial. If partial what is the nature of your future partial involvement?
  • Successor details and timeframe – who will take over and when will the succession be implemented
  • Personnel – note any changes to roles and what documentation exists to ensure you retain the skills and intellectual property into the future. You may also like to include details about proposed training for possible successors. Who will succeed the current head of the business?
  • Registration – details of the registrations to be changed such as business name, domain names, permits, licences or any other transfers to be covered
  • Legal – terms of succession, contracts to be modified, will/testament, plus any buy-sell agreements
  • Insurance – details of any insurance policies held such as death, disability or injury.
  • Risk management – What plans are in place to deal with risk such as loss of key team members.


  • Business value – including any assets or savings and note any asset shortfalls required for the future functioning of your business.
  • Sale information – If the succession plan involves the sale of the business, an agreement should be in place to cover this contingency.
  • Shareholder agreements – any pre-arranged agreements with shareholders that must be taken into account.
  • Income – what income will be required for the owner or their family should they pass away or retire
  • Capital requirements – any requirements for capital for debts, capital gains tax or to provide an equal share for each family member
  • Tax – what tax exposures does the business currently have or will have in the future


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