It takes energy to build a business while raising your family.
And all the while you’ve been thinking about the legacy you’re building for them.
But what happens if you want them to follow your path and they don’t? 💡
After all, we are all different, with different ambitions, wants and needs.
If succession is part of your plan, it also makes sense to get your business ready for sale.
We know that previous generations tended to follow in their parents footsteps. However younger generations are more likely to follow their heart and own desires.
Firstly, preparing for sale provides a back-up plan if they want to do their own thing.
Secondly, there is a huge overlap in the steps you need to take when selling or handing over a business. Here are some key tasks:
- understand the value of your business. Get your balance sheet in good shape by checking that the asset values reflect current market conditions and all known liabilities are included
- check how each part of the organisation is performing by having good management information to enable well informed decisions
- understand your contribution to the business and how and when this is being taken over – is your role well defined and have you passed on that role and your knowledge to someone else, enabling a smooth transition
- If selling to a third party ensure you know what intangible benefit you bring to them. Can they use your customer database to promote their offerings, can they sell your products or services via their sales channels, have you got strong management or IT skills they lack and so on
- check that the time family members spend in the business is reflected in your analysis of performance – how will they be affected by the change and do they get paid market rates
- take good tax planning advice to ensure maximum value to you and good legal advice to ensure you are protected should anything go wrong e.g. have any personal guarantees been released?
The list goes on. However, if you want the most value for you and your family from your business, then it is imperative you get professional advice to guide you to maximise your position.