More than a third of the dealers in a recent Rural Lifestyle Dealer poll say they plan to retire in the next 5 years and our succession expert, Rex Collins, says succession planning should begin 10 years before the owner plans to retire or exit from the business. What are your plans and are you ready, willing and able to transition out of your dealership?
A recent survey by Nationwide Insurance uncovered some interesting attitudes about retirement.
- Small business owners (SBOs) are neglecting retirement and succession plans. When asked when they plan to retire, 32% of SBOs replied that they do not plan to do so. Two out of three do not have a succession plan in place, with almost 40% of them indicating they do not think it is necessary.
- SBOs do not realize that regulation could determine the fate of their business. Forty-two percent of SBOs are not aware that succession laws vary by state, and that the state could determine the fate of their business’ future in the event of a crisis without a succession plan in place.
Succession planning is one of those “must-dos” that seem to fall lower and lower on a priority list, with daily business activities taking over the brainpower of many dealers.
Nationwide’s survey also identified a key obstacle — identifying who will take over the business. According to the survey:
- 30% said they plan to pass down to a family member
- 27% plan to sell to an undetermined third party
- 11% plan to pass down to an employee or group of employees
- 10% say they have other plans
- 23% don’t know
We are asking this same question in our poll for the week to help narrow down what rural equipment dealers are planning, so we can provide targeted information to fit your needs. Take the poll today.
We have been covering the topic this year. Our winter issue featured Part 1 of the Succession Planning: Step-by- Step series by Collins, who is a CPA, certified valuation analyst and principal at HBK CPAs and Consultants.
Part 2 runs in our spring issue, which should hit your mailboxes next week. Watch for it and start breaking down the seemingly overwhelming effort into 10 manageable steps.
If you are still unsure about how and where to start, ask yourself if the real obstacle is your emotions. Collins says, “For many dealers, the dealership is like their child. They are committed to their business, to its grooming and success, and their ties to the business are emotional, just like with their offspring. Therefore, succession planning has to consider these emotional ties as well as the financial aspects of retirement, transfer and transition.”
Because the process can be a long one, don’t delay anymore. Regardless of your age, protect the interests of your business, your legacy, your families and your employees by starting succession discussions.