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Transition Series

What its’ worth now, and how

Maximizing the value of your business starts with knowing how much it is worth today. It’s crucial to assess the current performance of the business and determine if it is ready for transition. Decisions can then be made on what needs to be done to prepare the business. The value of the business is actually inversely related to the amount of time that the owner spends on it.

transfer of knowledge

If you as the owner are still personally responsible for the many daily business functions (finances, strategy, operations management), you are the one holding all the cards, and not many buyers would come to the table willing to bet big on the company once you are gone.

Many educated buyers would see this as a real detriment to any company: once the owner goes, so too does the business knowledge and intellectual property. To mitigate this, and enhance the value of your company, you must start a transfer of knowledge and of the day-to-day responsibilities to people you trust. Whether it’s promoting internal team members and nurturing their potential to lead, or bringing in the right experts to manage such things like the finances or operations, these people become valuable assets that may actually help increase company value and attract the right buyer.

“To enhance the value of your company, you must start a transfer of knowledge and of the day-to-day responsibilities to people you trust.”

While you may think that adding such people means additional costs, more salary, and less profit – this is usually only a short-term problem. Once you have skilled people in place, performance can increase and these people can help grow the business further. We saw this happen in an instance where after implementing these changes, the owner sold the business for significantly more than anticipated originally. Why? Because the added management had helped increase profits substantially!

As a precursor: these changes can take roughly two (or more) years to implement. Restructuring to make a company more attractive to an outside purchaser is a great opportunity to consider. Business owners start transferring knowledge, and exiting slowly with less pressure. A detailed action plan formulated to address each area in need of development will help attract the right buyer and lessen the stress of the process along the way.

How we can help you

When we say our approach is holistic, we mean it. It’s centered around you. Not just your company; not only your legacy, you. We advise business owners and their families both personally and professionally. Our professionals, (from wealth management, valuations, taxation and estates, to various other service lines) work collaboratively to provide advice that makes the most sense for you and your objectives – because we know that your work affects your personal life, and vice versa – they are of equal importance. Through early, comprehensive planning, our professionals assess every situation and present options to help you make informed, strategic decisions to make the most out of your unique situation.

Read more articles on business succession planning:

Effective succession planning: 6 questions to ask before getting started

Freezing value = saving long-term

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