Taking an integrative approach to business transition planning is something that many owners fail to consider when they think about retiring or selling their organization. During this period of transition, it is vitally important that your plans for your business and for your personal life are aligned. You need to develop a coherent strategy, in order to have a clear idea of your path forward.
In Part 1 of this blog, I explained some of the ways that an integrative approach to business transition planning can help. Now I’ll go through the rest of them!
6. Reduce Business Risk
Reduced risk for your business will make it more attractive to potential investors. Consider ways that you can make this happen. For example, purchase key man insurance or buy-sell insurance policies. Institute compensation plans to retain key employees. All of these strategies can be valuable ways to reduce risk.
7. Reduce Personal Risk
The majority of business owners have 80% of their net worth tied up in their business. How much of your money is in your business? The key strategy for reducing personal risk is investing outside of your business, so make sure you do this! Remember that ensuring your business is as strong as possible means reducing its reliance on you.
8. Minimize Taxes
Proper transition planning will ensure taxes are minimized by the time a transition occurs. This will often include consulting with a chartered accountant or other tax specialists to figure out how to achieve this result. This is an important part of the planning process.
9. Be Prepared For Unsolicited Offers
Is your business prepared for a hot market? If not, then here’s what you need to do… Have a thorough understanding of your options. Know the state of your business. Make sure it’s ready for a sale. Preparing your business for the unexpected will allow you to take advantage of the market, as well as allowing you to react more appropriately to unsolicited offers.
10. Have a Smoother-Running Business and Create More Transition Options
Following the steps outlined in this blog for good transition planning can help you run a more profitable company and create a better work-life balance. In turn, this will create more peace of mind for you, the business owner! This continuous strategic planning will provide you with more transition options—when the day comes for you to start the next phase of your life.