Business transition involves new ownership and management: whether you initiate a business transition to gain more growth opportunities or to gradually transition out of your business, having a plan will ensure you take the measures necessary to secure the best stewardship.
In this video, I discuss the three main types of business transitions most business owners have heard about and offer more details to help others begin exploring their options.
Check out the transcript for the video below:
This is Keith Atneosen, founder of Freedom Summit Consulting. When it comes to business transition, there’s generally three types of ways that you can transition out of your business.
The first is an external sale where you find an external buyer, and within that realm, there’s a lot of different options – from a strategic competitor, for some companies they might be attracted to a private equity firm. But that’s the first category of an external transition.
The next type, the second type, is an internal transition where you can hand it off and it can be a sale – in most cases, it needs to be – where you sell it to your management team. It could also be family. This type of transition will often have the best preservation of legacy and mission continuation.
Finally, the third, and really the worst way, is feet first where they carry out the door. That’s the type that we really want to avoid by having a plan in place.
But the bottom line is: your business will transition, and the sooner that you begin planning for that transition, the more likely you’re going to find success.
What You Should Consider Before Starting a Business Transition
Business owners must consider their business values, personal values, and future. You should identify what you find most important in transferring ownership of your business for security and preparedness:
- Do you want to maintain some influence and control over your business and if so, for how long?
- Is preserving the current company culture, your mission, and your values important to you?
- Do you want to secure the positions of your team?
- Will you establish a family business to be handed down?
Why Business Owners Benefit From Transition Planning
- You will have confidence in your business transition decision with professional advisement, review, and assessment of your long-term personal and professional goals.
- You have the opportunity to maintain the values, mission, and culture that built your business.
- You will know ahead of time how much involvement (if any) you will have in your company.
- You will pursue optimal financial compensation while minimizing potential losses by choosing the best sales strategy.
Business owners who need a certified exit planning advisor and coach to assist them in creating a business transition plan can book a consultation with me today.
