When it comes to the value of your business, you don’t want it to be in the eyes of the beholder. As with most things in life, if you want everything to go according to plan, it’s important to make sure everyone’s on the same page. The key is maintaining clarity, which includes alleviating inefficiencies and room for interpretation. Together, we can plan your exit strategy carefully to maximize the value of your business. Read the following and learn how to start planning early to ensure a smooth business transition.

First, let’s address uncertainty. The pandemic has had substantial effects on every industry. Change has become the norm with varying degrees of negative outcomes and positive opportunities. The important question to ask is, “How is your industry changing or going to change?” Once you answer that, you’ll be more equipped to pivot, innovate, and take advantage of opportunities that come your way. Ultimately, your goal should be to achieve stabilization, to create growth and value in ways you might not have anticipated previously. This line of thinking is not very different from the way business is done normally which is why we believe it’s not about overhauling what you do but tweaking. It’s about going back at the details and seeing if you can provide a product or service that’s more in line with what people want now or from now on.

Next, let’s discuss the options available for finding a successor. Many go the tried and true method of keeping it within the family because you can maintain trust in the community, rely on people who understand the ins and outs of the business, and know that the right education, expertise, and experience is there. But sometimes you might not get this lucky. If you don’t have someone who makes a good match in your family, don’t force it. Better to look elsewhere—like your existing management team or going to market.

Leading a smooth transition can be complex and of course, every business has its own unique set of considerations. However, there are a few ideas that work across the board; they include strengthening the team, looking for opportunities for growth, maximizing profit, extracting non-operating assets, and understanding tax strategies.

We all know this one, there’s no I in team. Your customers and suppliers will trust your business more if you let key employees be more involved. Avoid taking everything on by yourself, let departments run without being micromanaged, and facilitate bigger conversations on a consistent basis. The more your team understands what makes the business successful, the better.

Your business is at its best when it’s growing; when there are still opportunities to be found. Take a step back and ask yourself what you would do if you had all the time in the world. Then, set it in motion.  Just taking the step of developing a proof of concept for a growth opportunity can help increase the value of your business.

Here comes the tedious yet necessary part. Clean up the business. When you show internal documents to external consultants, you want to make sure you’ve already separated out personal expenses. Generally, they’re looking to see five years of clean accounting records so you may need to eliminate inefficiencies and make the books about the business, and the business only.  This includes extracting retirement funds, non-operating assets, real estate, and anything else that could cloud profitability. It’s in your favour to create a clean and clear picture of what your business does. Over the years, you may have also engaged in a tax minimization strategy or tax deferral strategy. Now’s the time to talk to a tax expert and ensure that these strategies don’t muddy your business’ history.

There are many ways to successfully plan a business succession. It’s why our team leans on a wide range of backgrounds and experiences. We make it our priority to understand your world and your industry, so you can feel confident your legacy will continue on.