Business Plannning and Transition

Ready to hear a reality check from other business owners?

  • Nearly three-fourths of privately held manufacturing firms in the U.S. were formed between 1960 and 1980.
  • Only about 14% have a succession plan in place for their company if they should die or become disabled.
  • Half of all business owners expect to sell their businesses to an outside buyer when the time is right.
  • At any given time 20% of privately owned businesses are for sale, and only one in four will actually be sold.
Here's what is important about these stats*. When we ask business owners when they see a major transition in the ownership of their businesses, most of them reply, "Five years." Suppose they don't start the plan today, then next year it will still be five years out and the year after that another five. Meanwhile the statistics imply that with every passing year the market for business sales will become more and more crowded.

* John H. Brown - Cash Out Move On: Get Top Dollar, and More, Selling Your Business

Every successful exit strategy requires tough questions and careful advance preparation.

  • What's the value of my business today? Is that what I think it's worth or what the marketplace would think?
  • How can I preserve the value through more effective financial and operational management?
  • How can I protect it from creditors?
  • How can I promote its value through value drivers?
  • How can I prepare for acquisition - either cash or note or other option? For a merger?
  • How can I manage contingencies - loss of shareholders, key people, financial resources, intellectual assets, customers?
  • How will I manage the new family assets my business becomes?
We have walked many business owners through these concerns to start the planning process and monitored progress as the plan progresses. For virtually all of them the business represented the largest single asset in their estate- - which then led to integration of business and estate planning. No surprise - the commitment to planning your exit from the business mirrors your commitment to building it.