You are half-way there, friend.
Facing the facts, then breaking the planning inertia is essential.
Unfortunately, too many family-business owners are nowhere near prepared to transfer their businesses.
While there are several reasons why business transition planning is critical for business owners who want to protect the future value of their enterprise, ya gotta have a plan.
So, plan the plan, then work the plan.
As Convenience Store News recently reported in “How to Create a Transferable Family Business,” there are several steps you can take right now to ensure your business will be transferable for the value you expect.
Get the Big Picture.
You need to keep the business moving in today’s business environment. If you are not moving forward, then you are falling behind.
Define your vision for both the company and yourself, so you will not be surprised by potential threats.
Without such vision, you may be trapped in your business or not get the value you anticipate when you exit.
Be certain that you and your business are prepared for the future. Protect owner value and increase the likelihood of a successful transition to a new owner.
Start the Planning Process ASAP.
Commit to an assessment and review planning process, and review your current strategic corporate and personal planning to reveal threats and identify opportunities.
Here are four steps recommended in the original article:
- Examine your personal and business goals and objectives.
- Ascertain your level of financial and mental readiness.
- Consider transfer options.
- Review your financial, estate planning, and investment plan to be sure everything is aligned with your transition plan and family wealth plan.
Decide on Valuation Strategies.
Determine how much money you will need to cash out.
Understanding the value of your business and how it fits into your financial and estate planning is vitally important.
A business broker can help you determine what your business is really worth.
Look at Industry Trends.
Evaluate the trends in your market to see what future owners may value in a company they purchase.
Investigate the competitive position and comparable values in the industry.
Gather industry intelligence to help with your preparation for making decisions when the opportunities arise.
Calibrate Your Company’s Owner Dependence.
The value you get for your business may be based upon the level of control you want to maintain.
The less your company depends on you, the higher the value of the company.\
Hey, that sounds like a win-win.
Find and Keep Executive Talent.
Talented managers can be a real value driver for your company.
Look at your key executives rank in terms of skill and ability to operate the business.
Be certain you have the best people on staff to help the business grow and motivate them through incentive-based compensation that is consistent with the company’s goals and succession plan.
Leadership and Collaboration.
Leverage the expertise of an advisor team to review and make sure all of your planning is on track to accomplish your goals.
Investigate goals for the business and strategic issues, like contingency plans for unanticipated circumstances.
In addition to your estate planning attorney, consider partnering with an independent business advisor who specializes in business transition planning.
If you want to assemble a top-shelf team of advisors, then your estate planning attorney can be a great resource. After all, he or she is the only professional advisor with whom your confidences and secrets are legally protected from future disclosure.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Convenience Store News (October 4, 2016) “How to Create a Transferable Family Business”