In the current economic climate, business owners contemplating significant changes are often faced with a multitude of complex considerations.
Considering a Business Restructure?
If you have decided that restructuring is necessary to ensure the sustainability of your business, it is important to follow a clear, compliant process to minimise disruption and mitigate risk.
Recommended Steps for Implementing a Business Restructure:
- Prepare a written proposal clearly outlining the rationale for the restructure, including why changes to roles and responsibilities are essential for the continued success of the business.
- Notify employees via email that a restructure is being proposed and invite them to attend a formal consultation meeting, providing at least two to three business days’ notice.
- During the meeting, present the restructure proposal in detail, including the potential impact on roles and operations. Actively encourage employee feedback either via email or by arranging one-on-one discussions following the meeting. Where redundancies may be involved, it is essential to demonstrate a genuine willingness to consider alternative suggestions that may better serve the business’s objectives.
- Any proposed amendments to an employee’s terms and conditions of employment must be documented in writing. Employees must be advised of their entitlement to obtain independent advice and be provided with a reasonable opportunity to do so.
Preparing to Sell Your Business:
If you are planning to sell your business, it is crucial to undertake a thorough preparation process to ensure it is presented in the most favourable light prior to valuation.
Key Preparation Activities Include:
- Dispose of any surplus or non-essential assets, cease investment in long-term projects, and prepare a realistic and supportable financial forecast.
- Develop or update your business plan to reflect current operational performance and future growth opportunities.
- Resolve any outstanding legal matters and address staffing issues proactively.
- Ensure compliance with relevant health and safety regulations and review the adequacy of your digital infrastructure, including cloud-based systems and accounting software.
- Assess the functionality and presentation of your website and social media platforms to ensure a prospective buyer can transition smoothly into operations.
- Engage with your accountant to explore strategies for increasing sales revenue and enhancing profitability in the lead-up to the sale. Keep in mind that a business’s value is primarily determined by the last two to three years of trading results and its future maintainable earnings.
