Expert Outlook: Mark Steinhardt - Executive Director, InterFinancial
As we celebrate 20 years of Queensland Leaders, Mark Steinhardt from
InterFinancial
examines the future of succession planning and business exits in a market where the options are expanding.
Mark holds the view that business owners who plan early will have greater control over both value and timing. That’s because ultimately,
“there will always be a buyer for a good business.”
The next horizon
The traditional business exit is changing. For many years, succession planning centred on a limited number of pathways. Sell to a competitor. Transition to family. Or simply continue operating until retirement.
These days, owners have access to a broader range of options. Private equity. Strategic buyers. Family offices. Management buyouts. Patient capital. This creates greater flexibility to achieve the objectives of business owners.
The future of business value and succession will be guided by these factors:
Diverse exit pathways
Different buyers bring different investment styles, objectives, expectations and horizons. This will allow founders to pursue opportunities more closely aligned with their goals, and with the strengths of the business.
Heightened competition
As more baby boomers approach retirement, there will be more companies for sale. Choice for investors means better preparation and positioning from business owners will be critical.
AI-enabled due diligence
AI will help investors assess opportunities much faster and in greater detail. While this can streamline parts of a transaction, it also raises the level of scrutiny around performance and capability.
The human factor
Despite technological advances, exits are deeply personal processes. Outcomes are influenced by owner objectives, investor motivations, adviser behaviour and impact on employees.
Practical implications
Business owners should think about an exit long before they intend to sell.
It’s imperative to get the fundamentals right. Financial records, legal structures, tax arrangements, employment agreements and governance frameworks all contribute to value and investor readiness.
Leaders should also understand the type of exit and the likely buyer. This provides clarity on what investors are looking for and helps prioritise investments that will have the biggest payoff.
Defining advantage
Over the next decade, the founders who achieve the best outcomes are likely to prioritise these areas:
> Clear succession and exit objectives
> Trusted advisers and deliberate planning
> Strong financial and operational discipline
> Compelling growth record and story
> Reduced dependency on the owner
Building value and realising value are closely connected. Regardless of the exit horizon, all of these actions will help create a stronger, more resilient business for the current owners, as well as positioning for a stronger exit.
Key takeaways
1. Owners have more succession and exit options than ever before and early planning is essential.
2. As M&A activity moves in cycles, resilience and flexibility remain important characteristics.
3. People matter and that’s why individual motivations remain critical to successful transactions.
Final thought
“There will always be a buyer for a good business. If you build a business that has a defensible competitive advantage, and isn't reliant on the owners to operate, you'll maximise your opportunity for a successful exit.”
Mark Steinhardt – Executive Director, InterFinancial
What if… you plan for the business exit you deserve?
