Professional advice: cost or investment?

OPINION: Amongst regional councils, Marlborough has the highest median age in New Zealand, driven by a combination of an ageing population and the migration of older retirees attracted to this fabulous region we live in.

This is also reflected in the average age of business owners and as the population continues to age, more and more owners start to consider selling or transferring to the next generation.

I attended a great event this month, along with 50 or so local business people of all ages, hosted by BNZ along with Strategic Specialists Group, Icehouse and with a bit of help from the Chamber and Angel Investors Marlborough. The focus was on Succession Planning or Exit Planning, a topic that’s extremely relevant to many businesses in Marlborough. Not just because of the steadily aging business owning population, but more importantly because, according to Forbes, over 70% of business owners who do sell profoundly regret their sale in the following 12 months.

That’s not to say that owners shouldn’t sell businesses, but rather if they want to do that without regret, then proactive planning for that succession or sale, starting years before the ideal date of sale, is the way to go.

The fact that only 30% of businesses survive the transition from 1st generation to second generation, and only 12% survive the transition to the third generation, suggests getting some professional help with the process makes absolute sense.

The most insightful comment I heard during the session was that in New Zealand, many business owners tend to see getting professional advice as a cost rather than an investment.

Whether that be an accountant, a private wealth adviser, a lawyer, mentor or an agent, so many people only see the cost, not the added value and potential to help grow their business.

Even if a sale is 20 years away, getting support and help from professional advisers can really add to productivity and profitability. See it for the positive investment it can be.

The same consideration of cost rather than investment sometimes holds back businesses owners or managers from investing in professional development for them or their staff.

However, the benefits can be great; improved productivity, efficiency, wellbeing, and potentially better retention rates.

So if you’re considering retiring or the next stage of life, then do start planning for that time. It’s all too easy to be too busy in the weeds of the business, but as Harry S Truman said: “Imperfect action is better than perfect inaction.”

Giving this some time and thought before the ideal time to sell or go through succession will reap substantial rewards and give you a much better chance of not being in the 70% regretting their sale.

STUFF Marlborough Chamber of Commerce chief executive Pete Coldwell says good planning before selling your business is critical to ensure you don’t regret passing it on.