Successful business exit comes from developing and implementing a deliberate Business Transition strategy that is value accretive and personally satisfying for those retiring and those succeeding in managing and owning the business.

Often 1 – 2 years is necessary to prepare a business into the best shape for succession. You will need a deliberate program to de-risk, to optimise the financial performance and to develop the leaders that will take over. The risk of an unplanned succession increases the longer that we stay IN the business.

The following activities utilising expert advisors will ensure sale value is maximised:

• Identify value – determining the starting point, including business valuation.
• Protect value – making sure we have proper risk management and asset protection in place.
• Maximise value – working to make sure business value is maximised and ready for exit.
• Extract value – the liquidity event or transaction.
• Manage value – ensure post-sale assets are protected & value is invested to fund retirement.

For a Family Business, handing ownership to another family member may not be the best option for either the business or the family. It is important to understand the linkages between the different components and to ensure they are done in the right order. The components of the business transition plan are:

• Retirement plan: determines the timing of the exit from management of the current owner and that person’s financial requirements to fund their retirement.
• Exit plan: this needs to take into account the current owner and needs of other family members financially reliant on the business.
• Business Management succession plan: the timing is determined by the retirement plan and determines who will take over running the business and which family members should receive equity.
• Equity succession plan: the retirement plan determines how financially reliant the owner will be on the business performance.
• Estate plan: the equity succession plan then needs to be incorporated into the estate plan of the owners.