We regularly meet with construction business owners in South East Queensland, and it’s alarming
the number of business owners who don’t have a succession plan. Not only do they not have a
documented succession plan, they often haven’t given it a single thought.
In the midst of quoting, running jobs, managing clients, keeping cashflow in check and hopefully
making a tidy profit, they haven’t taken the time to consider how their business would keep
operating and making them an income, should they be injured or otherwise unable to work. This
failure to plan occurs in larger businesses almost as regularly as it does in a smaller business. In a
high risk industry, such as construction, it’s vitally important to create a succession plan.
Business.gov.au has a simple template and guide that can get you started. The idea is to create a
plan now, when the business is operating well and everyone is healthy, so you don’t have to make
rushed decisions, possibly with poor judgement, if a disaster occurs. Planning for the future enables
a smoother transition, if and when the plan needs to be implemented.
A succession plan will also help to sharpen your mind, when it comes to defining what you want to
achieve from your construction business.
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Is it a business investment you hope to sell for a profit?
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Do you intend on bequeathing it to your children (and do they know this)?
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Do you want to continue to receive income from the business is you are unwell or injured?
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Would you consider only stepping back partially, and what would that entail?
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Is there an obvious successor, and if so, who would replace them if they moved into your role?
Together with your accountant, business advisor and solicitor, there are areas of the business you
need to consider in business structure terms, such as:
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Which entity and/or individuals will be responsible for any QBCC or other regulatory requirements?
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Does the structure of the business need to change, i.e. from sole trader to partnership or company?
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Are there any legal documents or loans that need to be considered?Is there a buy-sell agreement in place, or that needs to be prepared?
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What insurance do you have in place in the event of illness, injury or death?
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Do you have a will?
As part of this planning process, depending on your current position, you may also choose to create
dates to work towards, for say, listing the business for sale, or transferring ownership to a family
member.
A succession plan for the construction industry doesn’t have to be challenging or complex, but it can help to work with trusted advisors to work through scenarios and technical situations that are more easily considered during times of smooth sailing.
If your construction industry business is facing what seems like endless challenges with no time to
consider succession (or any type) or planning, talk to the team at Tax Strategies Australia. Our no-
fuss, solution-focused approach means you can focus on growing your business in a strategic,
profitable, positive way. Contact us today for your free construction industry financial reporting review.
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