Planning to transition your business over to new hands? Answer these questions
There are a lot of things to consider when planning for your business’s future. This assessment will help you determine if your succession plan is fully ready.
1. How far along have you gone in your succession planning?
It’s a good idea to start thinking about a succession plan long before you actually plan to exit your business. To do this, start by thinking through big picture questions about what you want for the company long term.
2. Who do you want your business to go to when it transitions?
Knowing the direction you want to take your business in long term can help you with management decisions now. For instance, if you’re considering selling the company, you may invest in parts of the company that are most attractive to buyers.
3. Have you identified your transition team?
A trusted team of financial professionals, including your accountant and lawyer, may be able to help you come up with a concrete succession plan based on your long-term goals.
4. Have you prepared your business for a possible sale — created marketing materials or had an M&A professional review your books?
It can take years to position your business for a possible sale. Even if you’re not set on a sale, have your business valued regularly so you know what to ask for and be ready to draft a buy and sell agreement for interested buyers.
Deciding what to do with your business takes a lot of planning. You may need to have multiple conversations with your family, as well as a team of trusted professionals. Ultimately, thinking ahead can make the process smoother for both you and your family.