- Business transitions come with a lot of unknowns and getting ahead of four key areas can make the process more pleasant.
- Start by assessing your personal situation to better understand where your transition plan could falter.
- Then, create a plan to address potential challenges so you can enjoy the celebration you deserve.
Ready to start laying out a transition plan?
Business owners often know they should plan their transition, but something prevents them from moving forward. Maybe they even outlined a transition plan but never started executing on it. They are stuck — and may say things like:
- I love what I do, it is my hobby.
- If I retire, I will die.
- I don’t have anyone who can run the business like I do.
When thinking about transition planning, you need to consider more than how to structure a sale, the company’s value, and how cash flow and sales may impact the return on investment. There may be important emotional aspects to transition as well. When overlooked or left unaddressed, they can limit — or even destroy — an owner’s transition.
Identify which of these worries might get you stuck
With the right awareness and support, you can navigate your business transition in a way that brings peace of mind and confidence in your decisions. To identify what might hold you back, consider these four common worries and assess how they could impact your transition.
Will I have enough money?
Have you done the work to create a plan for financial stability post-transition? Business owners who work closely with a wealth advisor to develop a holistic financial plan take comfort in being well positioned to sustain the lifestyle they desire — or they have a clear understanding if more work is needed to get there.
Will my business be OK?
How critical are you to the function of your business? Business owners who have developed a team to run the business without them are more confident they can spend time away from the business, and know it can continue to operate well in their absence in the future.
Will my family be OK?
Are you worried about how the business transition might impact your family? Business owners who know their family will maintain their status and relationships after the owner steps out of the business feel more comfortable transitioning. Sometimes, to avoid conflict, families maintain a false harmony that keeps things cordial on the outside, but critical issues aren’t being addressed.
Navigate family dynamics in a way that brings clarity in communication, roles, responsibilities, and decision making. It may not be easy but it is often necessary (and in the end beneficial for everyone involved). Set yourself up for true peace of mind about leaving your family business.
Will I be OK?
Who are you if you are not a business owner? Business owners whose purpose is tied to the business tend to struggle. Knowing and planning what life will be like after transitioning is essential.
Take steps to move forward
These worries aren’t easy to address and working through them usually involves some tough emotions and difficult conversations. Some business owners may say these issues aren’t a worry for them. However, with a little introspection and discussion, we often find many owners struggle with at least one or two of these challenges.
Once you’re aware of potential obstacles and understand which may apply to your situation, you can address them, become unstuck, and continue planning and implementing your transition plan. As a business owner, you work too hard not to experience the wonderful celebration you deserve when stepping away from your company.
How we can help
Business transition planning can be deeply emotional and owners who bravely work through these four obstacles are well positioned to find peace in their transition. CLA’s owner transition advisory professionals are experienced in helping business owners address their business and personal goals, reduce anxiety, and provide financial peace of mind. We’ll help provide the resources you need to implement a practical plan designed specifically for your situation.