A crisis like COVID-19 will make everybody look at their operations and face some difficult questions – Will I survive? What changes will have to be made? But the most important question of all is, what will happen the business eventually?
Now that many businesses are opening up after a prolonged period of lockdown and interaction, many transport company owners, having worked tirelessly to sustain their business during the crisis are now assessing what’s ahead long term. Being unsure on how to sustain the next chapter, many are looking at their exit strategy in a manner they would not have done so before.
Many businesses have a clear plan from the outset, having built up a firm that provided a good lifestyle and pension pot. If the business can be sold, when the appropriate time comes, that’s an added bonus. These are few and far between in Irish transport, as normally assets in these businesses are rented and it’s the actual trading goodwill and multiple of profits that any value lies.
Most transport firms are family run, the logical hope is that the next generation will continue to own and operate the business. Here, the emphasis should be on careful tax planning in order that the next generation can receive a fair tax efficient sum and not burdened with undue debt or having other siblings availing of an opportunity.
One matter that has really come to light in this crisis is the process of business sale or transition, together with the lack of proper business continuity planning.
The issue of recruiting good staff to support the next generation in progressing the business is very timely, as many senior employees no longer commute long distances to work. Now the opportunity to work in what is now an essential industry has become more attractive, and with multiple Government support for the industry and a realisation that margin and profit are essential for survival, the road transport industry can attract a wider spectrum of talent.
Key to all future plans is the initial determination and realisation is that change is needed. Getting the business set up for this change, either sale or transfer and with correct tax planning is essential. Some business owners have been instilled with new drive to develop their business further because of the crisis, while some have seen how fickle or insecure their company can be. Some business owners have seen that they can now control the business remotely once a good team is in place and they want to develop that further so their work/life balance can be addressed.