Business Succession Planning

A business case where the dVT Group helped directors address all areas of their business to improve their profits and ultimately increase the sales value of their business to help them set up for their Life after Business.


A company with a turnover of approximately $5m and returning good profits had a dual ownership structure where both directors were nearing their 60’s and wishing to exit the business within three to five years. Their accountant was only engaged for compliance purposes, hence they had no exit plan in place and approached the dVT Group for assistance.A full review/due diligence of the business was conducted from which a number of matters came to light, including an ownership structure which was not optimal for sale without any allowances for the intergenerational transfer of assets and no SMSF being utilised to build assets for retirement. Other areas of concern were;

  • Risk – A lack of insurances including key man insurance, debtor insurance and no buy sell agreement
  • HR Issues – Including lack of policy, staff appraisals and WHS procedures either being outdated or non-existent
  • Turnover and profit were strong, however benchmarking showed gross margins were below average and staffing costs were too high, creating a potential profit gap of over $350k per annum.

The business was valued at the time “as is” for $3.9m


A strategy was developed and implemented that focused on improving the business profitability to increase its sale value and to separate all personal and business transactions. The strategy included;

  • Modify the ownership structure to family trusts and where possible, releasing owner guarantees with the business premises and appreciating assets also being transferred to a SMSF structure
  • Obtain expert tax advice to ensure the directors maximised their returns upon sale
  • Engage HR specialists to resolve HR issues, introducing comprehensive policies and procedures
  • Staff appraisals were linked to a new bonus structure which focused on profit and growth
  • Appoint a business coach to up-skill key personnel for management succession
  • Appoint a new accountant to take a proactive approach to the company and hold regular meetings with the senior management team to review performance against KPIs
  • Discover owners interests outside of the company operations for their new “life after business”


The business profits showed the expected increase and the reliance on the owners was gradually reduced with their assets now better protected through insurance and agreements and their wealth being accumulated outside the company. HR Issues were resolved and staff costs became industry best practice with systems and policies in place throughout the company. This included key personnel being coached and their improved performance allowing a gradual reduction in the owner reliance.

The company was sold for $4.9m, a value gain of $1m to the former owners who now have a “life after business”, which includes consulting to and mentoring the new business owners.