There can be many advantages to selling a business internally, but there can also be some challenges. One of the main challenges is maintaining objectivity about the situation, including your potential successor’s capabilities and whether they align with the needs of the company. If you plan to transition your business internally, make sure that you take the time to properly evaluate your potential successor(s) and develop his or her business and leadership skills well in advance of when he or she will actually take over the business. Some managers are fit for future leadership, and possibly ownership, while some are not. Going from an employee to an owner is an interesting and tricky process that can be a challenge even for the most skilled manager.Read More
Topics: succession planning, Grooming a successor, choosing a successor, family business successors, business ownership transition success, Business Ownership Transition Planning, family business planning, family business challenges, passing business to my family'
“While 54 percent of business owners plan to leave their business in the next 10 years, 72 percent [of those] have taken no exit planning action,” according to a recent study. For most business owners, their business is by far their largest asset, and not properly planning for its transfer can put them, and their employees and family members, at risk. Being prepared is the key to success. It starts with owner education, allowing enough time to plan, seeking the best advice, and creating a Business Ownership Transition Plan (BOTP). A BOTP is a comprehensive written document that outlines how and when the ownership of a business will be transferred to others, either internally or externally, in order to achieve the owner’s long-term financial and personal goals.
We would like to invite you to join us for our upcoming BTA Transition Partner Program webinar, The Importance of Strategic Planning and Leadership Development for Next Generation Successors in Family Business Transitions, on Friday, May 13 at 2 pm EST. During this webinar, we will be joined by Marvin L. Smith, President of Deliberate Synergy. We will be discussing the importance of strategic planning and leadership development for next generation successors in family business transitions.Read More
There are several different types of buyers in the business marketplace, including strategic buyers that are able to realize synergies through the purchase of your business, and financial buyers, such as private equity firms (PEFs) that are looking to invest in business to get a return on their money. While some financial buyers will want to buy 100% of your business, others will buy a controlling share and allow you to maintain some ownership as well so you may get the proverbial “second bite of the apple” when the business is sold again in the future.Read More
Most business owners think that they simply will sell their business to a third party because they don’t have an option for selling their businesses internally and/or they think it will net them the highest dollar amount. While selling externally is often attempted, it is not often achieved. In fact, less than one in four of the businesses that go on the market for sale actually sell. Understanding the selling process, what buyers and lenders are looking for, and how to position the business can improve owners’ chances of success. But this takes time and effort.Read More
Topics: Selling Your Business Externally, taxes, selling my business, selling your business in 2016, selling to a private equity firm, taxes on sale of business, selling your business to a third party
Most business owners have dedicated the vast majority of their adult lives to building their businesses—committing years, sacrificing little league games, vacations, tee times, and foregoing sleep to follow their passions and achieve their goals. They have succeeded in creating jobs, new inventions, and a comfortable lifestyle for themselves and their families, giving back to their communities, and contributing to the local and national economy.Read More
Even if you don’t plan on transitioning away from your business for years, having a comprehensive, holistic plan in place gives you peace of mind, knowing that your business, your future, and your family’s future are secure. While many owners of family businesses want to keep them in the family, often, family dynamics can present challenges and concerns not present in other business ownership structures.Read More
“66% of children fire their parents' financial advisor after they receive an inheritance,” which is significant, especially given that: “Over the next 30 years, an epic $30 trillion will be passed down from baby boomers to Generation X to millennials,” according to a recent article “The Great Wealth Transfer is Coming, Putting Advisors at Risk” in Investment News.Read More
If your practice consists of primarily business owners, it could be at great risk. According to a recent article in Investment News Magazine, Game Changers - Generational Planning, “a whopping 66% of children fire their parent’s financial advisor after they receive their inheritance.”Read More
Owners who are thinking about selling their businesses need to be prepared. They need to consider the value of their business from the point of view of prospective buyers and learn how to maximize the value to achieve the best sale price. In addition, owners need to be aware of all of the other factors that will be involved during this complex process.Read More