The 5 Critical Steps of Owner Transition

  • Industry trends
  • 10/19/2022
Senior businesswoman talking to her team

Key insights

  • Build a knowledgeable, trustworthy team to support you through the transition process.
  • Compare your current state of readiness to your vision of your post-succession future.
  • Make a plan that considers your business, personal, and financial situation and hold your team accountable for meeting timelines and goals.

Get help preparing for the seamless transition of your business.

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Planning a transition out of your business can feel daunting without knowing where to start or what action to take. Review five critical steps that can help reduce costly delays and increase the chances of success on your terms.

Step 1 — Establish your advisory team

Get the right people on your team to support you through the process. This is likely the biggest financial transaction of your life. Surround yourself with people you can trust who also have deep specialized knowledge in key advisory areas. Don’t settle for one without the other. The following are the roles most common to an advisory team:

  • Certified professional accountant
  • Wealth advisor
  • Business attorney
  • Owner transition advisor
  • Investment banker

If you have a family business, you may also want to consider working with an owner transition advisor with family business consulting experience.

Step 2 — Determine what you want

Know where you are going and what you want your life to be like after you transition. Carve out time to think about your future. Where do you want to spend your time? Who are you with? What are you doing? Where will your sense of purpose come from? How much money will you need to fund this life you envision?

Step 3 — Determine what you have

To get where you want to go, you need to know where you are starting from. What is the current value of your business? What is the current baseline of your financial picture? Evaluate your readiness across three key areas: business, personal, and financial. Put yourself in the shoes of a potential buyer or the employee or family member who may be stepping into your role. When you look under the hood of your business what do you see? Is the company dependent on you to operate? What about process and procedure? How effective is your leadership team?

Step 4 — Make a plan to bridge the gap

Once you know where you are now and where you would like to go, the next step is developing a plan to get there. Start with areas that reduce risk to the business or you, personally. Plan to address any financial gaps, as well as build value in the business. Enlist your advisory team to help you understand what type of transition structure makes the most sense for you. On the business side, it may be time to pull in members of your leadership team to help you strategize.

Step 5 — Execute your plan

Don’t let your plans sit on a shelf (or in the cloud) somewhere. Regularly meet with your team and others involved to set priorities and tasks and map progress. Consider collaborating with your transition consultant or advisor to help hold you and your team accountable for meeting timelines and completing goals.

How we can help

With forethought and CLA by your side, you can address a complex mix of personal and business challenges and aspirations. Our experienced team can help provide the resources you need to implement a practical plan designed specifically for your company, your family, your goals, and your values.

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