March 4, 2020

Business Succession: #3 A strategic long-term approach that benefits EVERYONE

There can be benefits for everyone when a business owner takes a long-term strategic approach to business succession.

To borrow from international business commentator Simon Sinek, being in business is an ‘infinite game’ where business longevity is key. This means that for any business activity – and this includes business succession – the further you look ahead, the more profitable, robust and saleable your business will be.

Business succession is often assumed to focus on achieving short-term benefits for the business owner, but this view misses an important perspective. Business succession for the long term is about planning for your business exit in a manner that benefits you, of course, and others who contribute to your business such as highly or uniquely skilled employees.

Our best advice about business succession is to treat it as part of your business plan. This includes reviewing your succession plans regularly, far in advance of actually exiting your business even if you have no idea when that exit may be or what form it may take.

Treating business succession as part of your business now means that you will be able to make ‘real time’ decisions about planning to sell your business as you approach retirement or to take up another business venture.

Importantly, business succession isn’t just for older business owners. Business owners of any age can prepare for succession and in doing so provide themselves with exiting options whether that’s at retirement age or sooner. Here’s an example…


We recently worked with Steven*, the owner of an engineering firm who undertook business succession activities with the specific goal of enabling him to build the business and increase its value over the long term.

Steven wanted to bring in Joanne*, a senior employee, as an equity holder. As the business owner, his expectation was that Joanne’s talent, once established as a fixed component of the business landscape, would shore up the growth of the business and help increase its value in the decades ahead.

Joanne, whose skillset was rare and therefore valuable, was interested in increasing her commitment to the firm and prepared to contribute formally to the business success as an investment in her own future.

Comfortable with the long-term benefits of the strategy, Steven sought an approach that would be immediately attractive for both himself and Joanne.

Multi-disciplinary advice

In addition to seeking advice from us as his accountant and business advisor, Steven realised that legal and financial planning advice were also integral to developing, documenting and implementing the appropriate strategy for his circumstances.


The strategy included several key terms and conditions that were formalised by legal experts in the shareholders agreement and are summarised here:

#1 Steven provided the finance for the equity purchase and Joanne paid a deposit.

 #2 The deposit formalised Joanne’s commitment and also protected Steven’s cash position by ensuring he would not be out of pocket in relation to the tax liability arising from the equity transaction.

 #3 Steven provided a salary increase and guaranteed dividend stream for Joanne. This both recognised her increased commitment to the business and rewarded her for her investment.

#4 We advised on how the small business CGT concessions could be used as part of a suite of measures to reduce Steven’s tax liability and we worked with his financial planner who advised on the superannuation component of that CGT advice.


In the short term, Steven benefited from the opportunity to invest in the future of the business; Joanne by being able to take up the equity opportunity.

Over time, the business will see an uplift in profitability as a result of Joanne’s renewed dedication as a part-owner and her salary and dividend stream will continue to reward her for her commitment. Both Steven and Joanne will enjoy personal prosperity in relation to the growing value of the business. Then, should Steven decide to retire or exit the business for other reasons, Joanne will have options that will include buying his share; be involved in bringing in a replacement shareholder; or perhaps selling as well.


We are committed to collaboration at Resources Unearthed. To best serve our mining and resources business clients, we work with experienced lawyers for matters including dispute resolution, wills, trusts and estates, business structures, contracts law and shareholder agreements. We work with financial planners for matters including superannuation and SMSF, estate planning, tax reporting, cash management and wealth creation, including extracting wealth from your business.

Why our commitment to collaboration? We understand that you go into business to create profit and professional satisfaction, but ultimately to provide for yourself and your family by generating wealth. In our experience, given the overlap between the profitability of a business and the personal prosperity of its owner, close collaboration among your accounting and business advisor, your legal advisor and your financial adviser will help you achieve your goals most efficiently.

Your next step…

To find out more about how business succession planning can benefit yourself, the members of your team and your respective families, please contact Resources Unearthed on +61 (0)7 3007 2000 or

 * Steven and Joanne are not their real names.


Resources Unearthed is a solutions hub that provides integrated financial, legal, property and accounting & business advisory services for executives, professionals and business owners in mining and resources. 

The information contained here is general and not intended to serve as advice. Any information supplied is not a substitute for independent professional advice. We do not warrant the accuracy, reliability, completeness or adequacy of the information or material. All information is subject to change without notice. P+Y Accountants and Business Advisors and each party providing material displayed here disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. Users are encouraged to contact P+Y for advice concerning specific matters before making any decision.

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