What's the first thing you need to do when starting to think about selling or passing on your business?

You need to find a successor or buyer, right? Well, probably not. Unless it's really clear, this part of the process should be one of your last decisions before you start negotiating the deal.

The first thing most succession planning advisors will ask you to do is put some serious time into considering why you want to move on from your business and how you want to be placed when it's all done and dusted.

To help you through this thinking process, it's helpful to consider and set goals for three aspects of the succession:

Personal

What you want to achieve from the succession of your fishing or aquaculture operation.
For example: "I want to decrease my day-to-day input to the business so I can spend more time with my family and tinkering in my shed."

Financial

What you expect to achieve in a financial sense from the succession of your business.
For example: "I want my superannuation fund to be topped up so that I can retire comfortably."

Business

What you expect for the business during and following the completion of the succession process.
For example: "I want this business to build on its current sustainability credentials and to continue growing its reputation for providing top quality product every time."These goals may look simple: and on the surface, they are. But they deserve be given a lot of thought, as they will be the three planks on which your succession plan is built. Once these goals are set, they should be used as the guide against which all subsequent decisions are evaluated.

As you go through the process, you may find you want to change one or more of these goals. That's fine, but I'd suggest that you do so only after a lot of thought and then only make the changes that are really necessary.

But how do you know if a goal is right? I can't help you with the individual nuances of your decision making, but I do suggest that you make sure each goal is a SMART goal. And by SMART, I mean that each goal is designed to be:

Specific: in that it details the "What, Why, How" of the outcome that is required. e.g. "I want to boost my super fund by $X, so I can achieve an income of $Y, and I'll achieve this by extracting value from my business through a well executed succession plan"

Measurable: in that you'll be able to measure objectively the increase in your super fund, so you'll know if you are on (or off) track to achieve your goal

Attainable: in that the goal you've set is something that you can reach, even if it stretches you a bit along the way

Realistic: in that the goal is something that you are both willing and able to work towards – not necessarily easy, but do-able

Time bound: in that you have set a time frame to reach that goal. "Next year" probably isn't going to help much; "June 30th", on the other hand, will give you a bit of urgency and focus towards achieving the task at hand.

Once you have given your personal, financial and business goals the consideration they deserve, and you are satisfied that they each pass the SMART test, you'll be in a good position to start planning your succession strategy to deliver the outcomes you want and know you can achieve.

Tom Lewis manages the Seafood and Food Manufacturing Programs for Rural Development Services and can be contacted on 03 6231 9033 email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it