Putting together your own business is more than just a job. It represents more than a place to go to work, more than a career — it is a way of life. As such, planning for retirement or transitioning into another professional opportunity can be particularly difficult.
After all, you are leaving behind more than a simple job.
There are proactive steps that can help to better ensure a smooth transition. Here are three tips to help build a business succession plan
- Plan. Like all things business, planning ahead of time is always a good idea. If possible, start putting together a plan a few years before you plan to move on. Get an idea for who you want to take over the business or start casually discussing the prospect with potential candidates.
- Value. Determine how much the business is worth. A good valuation will help you decide how much you should accept if selling the business. It is important to determine the worth of not just the inventory, machinery and property but also the brand and customer base.
- Transition. Consider slowly transitioning out. One example involves a couple out of Minnesota that had spent 13 years building up their business. Instead of selling and moving on, they choose to take on a new owner and continue working at the business for a couple of years in an advisory capacity. This helped the new owners learn the practices that worked from the original owners and also helped to build trust between clientele and the new owners.
It is also important to note that it is important to have any business succession plan reviewed by legal counsel. Your attorney can provide guidance and suggestions to better ensure your business interests are protected during this transition.