Covid 19 – The Succession Planning Variant

They say the best laid business plans should pre-empt a future sale of the business from the outset.

A focus on being ‘sale ready’ will lock in all the key parameters necessary for a properly structured business plan.

These key drivers include –

  • Strategies for value maximization, be it rent roll growth or business profitability
  • A current shareholder / unitholders agreement to facilitate an orderly sale either internally or externally at anytime
  • Clarity around the business’s ‘people and culture’

The ravages of Covid 19 have proved once again, that the solid cash flow and sales platform that rent rolls provide are an essential ingredient in a real estate business plan.

Not only have many businesses survived and been sustained by their rent rolls throughout the Covid period, but also the collateral value base of their rent rolls has enabled timely counter – cyclical and opportunistic acquisitions. There have been a lot of big sales at high multiples, notwithstanding the ravages of Covid 19 on the real estate sector.  Some agents have both grown their businesses and realised an immediate succession via merger.

With the right internal paperwork already in place; businesses have been able to act quickly to acquire the rent rolls of those less able to survive the economic downturn occasioned by Covid 19.

Equally with proper succession plans already in place, businesses have been able to lock in key personnel at a time when vast numbers are leaving the industry or relocating into the regions or interstate.

More than ever, the perception of clients and staff in relation to a business’s culture and how it treats its staff, its clients, and its social responsibilities generally; are key drivers of staff and client retention.

Covid 19 has wrought many structural changes and post – Covid is the time to review the company’s business and succession plans.

At BIQ we can assist in helping clients maximise the value of their businesses and we are specialist rent roll brokers if an asset realisation or business merger / amalgamation becomes part of the business plan.