Even if you’re deep in the woods, building your business, preparing for your eventual transition protects you in case of unforeseen changes and creates value for your business today. Planning now positions you for a more successful outcome tomorrow.
These transitions require human, operational or financial capital and a renewed sense of commitment to the business. Changes may be necessary to prepare the business and put it in a position to be Transaction Ready. The transaction may be internal to your management team, employees or inter-generational to your family or may be an outright sale. Whether the transaction will be now or many years in the future, it is important that you always be Transaction-Ready.
At Birkdale Transition Partners we understand that you may be overwhelmed with operating your company and don’t have the time to develop a strategy for growing your business. Take our 15-minute survey and learn:
– How well your company understands and follows best practices.
– Which areas of your company provide the greatest growth potential.
– Where there may be risk in your business today.
– How your risks and challenges compare to others in your industry.
– What your business could be worth if you fix these troubled areas.
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A business that is Transaction-Ready has several options to choose from. The choices are either internal or external depending on the goals and objectives of the owner and the specific situation.
A family owned business creates complexities that are examined very carefully and, a generational transition can force difficult decisions. Many owners dream of keeping their business in the family, yet this becomes increasingly difficult over time. Ownership stakes become dispersed among family members whose priorities are heavily influenced by their age and involvement in the business. For instance older members approaching retirement typically prefer high dividends, while the younger generations might want to reinvest for long-term growth. Family members can end up feeling stuck because the bulk of their net worth is locked up in the business and they have no way to get it out.
In the face of such complexities, the goal of keeping the business in the family is sometime abandoned for an outright sale. In some cases, the family may not be aware of other available alternatives. Fortunately for families and their businesses, there are many options beyond the decision of whether to sell or not. Each solution has its own advantages and disadvantages.
A Deep Transaction Option Discovery provides you with an understanding of all your options and clarity on what is best for you under the circumstances to achieve the outcome you desire.
Planning as early as possible is the key. A successful transition to what’s next, takes time and should start long before the transaction. Studies have found that most business owners have between 80% and 90% of their net worth locked up in their business. In addition, a vast majority of business owners regret selling their business within a short period of time after the sale. The importance of the business for the financial security and lifestyle of the owner and their family cannot be underestimated. Reduction of this significant risk requires careful planning and action.
Understanding where you personally stand today, the transferable enterprise value of your business, what can be done to accelerate the value and reduce risk, and what you plan on doing after a transaction are keys to a successful outcome.
Once you are ready to transition your business, Birkdale Transition Partners can help you achieve the best outcome for your situation. We’ll determine your goals, explore your options and create an action plan enabling you to reach them.
We know there’s more to a successful outcome than just the transaction. It’s also about what you do next. That’s why our process includes exploring your goals for “life after business,” whether that’s a new business, philanthropy or building your legacy.