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Extracting value from 30 years of building a business: $8-18m over a 4 year Succession Planning program
Succession Planning is one of Gibsons’ core service offerings. We have helped position scores of businesses owners to retire, sell and otherwise leave their businesses in good condition. As insurmountable as some of the challenges may seem at the outset, the steps in this journey are often very logical. Gibsons’ consultants are adept and experienced at shepherding our clients to successful outcomes; helping them to exit on the best possible terms, often well beyond their initial hopes and expectations.
This case study is one such story.
At the time Gibsons were called in to look at succession planning for this client in the manufacturing sector, they had an annual turnover of $8-10 million with EBIT of 5-6%. Revenue was in decline and had been for some time. Key conditions relative to succession planning were:
Succession planning can take many pathways and individual perspectives and experiences of it differ. All of these issues were weighing heavily on the owner who had begun to doubt he could ever retire and extract the value that his family had spent three generations building.
This in turn created anxiety within younger members of the management team around their security within a business with an uncertain future.
Over the ensuing 3 to 4 years Gibsons worked with the owners to build a revitalised business with increased value, create a succession plan providing a future for the business and career paths for younger members of the team as well as exit strategies for the older members of the team and of course the owner. A range of activities were undertaken as follows:
Year 1
A business plan was created that centred around identification and agreement on key strategies for revitalising the business and introducing succession preparedness:
Year 2
Year 3
Year 4
These actions led to the creation of a much larger and more profitable business. Gibsons helped them grow to $18-20 million turnover at better than 10% EBIT to sales with transition to a new management structure and clear succession for key management and the owner. Gibsons are still relied on to guide the business to assist with growth and success into the future.