Ascend Business partners have developed a systematic approach, called the “Seven Steps to REFIRE”, to work with business owners to increase the value of their business and improve their profits. This allows them to exit their business with a valuable asset they can sell, transition to the next generation, or provide them with an ongoing passive income.
In this blog we share the sixth of the seven steps – Transition implementation
Do you know how to extract the wealth you have created in your business? If you choose to sell your business then it is essential that you properly prepare for this process. Selling a business for maximum value requires the creation of an information memorandum, completion of reverse due diligence and a clear identification on the buyers who will be prepared to pay the most for your business. Understanding the potential implications for capital gains tax is also necessary so that you will know your estimated net proceeds from sale. Transitioning ownership to family or management requires careful assessment of the skills and knowledge that the future owners need to successfully run the business. Implementation of any required training and development activities can take time to complete. Whichever option is right for you and your business it is important that you properly plan the steps required, give yourself enough time to implement the steps and utilize the right advice every step of the way.
You may be tired of it all. You could be sick of dealing with your business partner, tired of working to keep your business profitable, fed up with trying to stay a step ahead of the competition, or maybe you are just sick and tired trying to keep your business above the rest. From the other side, you may be operating a successful business but at the same time bored day in and day out with the same old same old. Maybe the problem is burnout after having spent years trying to get your business into a strong and healthy position.
Or you could be in the tens of thousands of baby boomers out there who are selling their businesses so they can sit back and relax with some fun in the sun. Before you get the business sale planning underway, you need to spend an adequate amount of time focusing on why you have decided to leave your business and take on other projects.
After you have obtained clear, definitive answers about your motivators for exiting the your business, you will be in a comfortable position to decide how you want to move forward so you can properly plan the next steps and get on the path for a successful exit.
Before moving forward, consider what you want for yourself in the long run. Do you want completely out of business? Do you want to stay involved in operating a business to some extent? What do you want to do with your time after you have sold your business? How much money will you need to live life like you envision after exiting your business?
By answering all of these questions, you can come up with a statement that emphasises what you want to achieve. You can put your goal into words using just one sentence. As an example, you may want to sell your business, retire and move to a relaxing beachfront villa.
By putting your objectives in order, you can determine how you plan to achieve your goals. You should plan out the specifics early on before you get the sale process started so you can improve your odds of reaching the outcome you desire. Your objectives should nicely bundle up into four main sections – timing, money, business ownership preference and business continuity. When you consider these crucial aspects of moving forward, you can come up with the most effective plan of action.
Most business owners don’t exit their business very often, so they generally don’t have the skills or knowledge to manage the exit process, irrespective of which exit option they choose. And there isn’t enough time in life to recover from the major mistakes that can be made when preparing to sell a business. It makes sense to engage a professional and experienced team to guide and support you through a well planned and thought out process.
Whether you are a small or medium-sized business, you need a team of experts to help you. There is not one person with all the skills and knowledge required to manage the accounting, tax, legal, planning, financial, transfer and negotiations needed to complete your succession plan. The best way to coordinate the different professions is to appoint a specialist exit and succession adviser. A properly qualified adviser will have credentials gained from the Exit Planning Institute (EPI) and will be a Certified Exit Planner (CEPA). A CEPA has the knowledge and skills needed to properly plan and co-ordinate your exit. They will be able to map out a process that clearly sets out when the appropriate expert is needed, as well as ensure there is a clear brief on what services are required.
Many examples of failed succession plans can be attributed to experts who have not been properly trained in succession planning. Don’t let yourself be a casualty.
To find out how to create the ideal exit strategy designed to meet your personal needs choose one of the following easy options:
Photo Cred: Huffington Post