Is Your Business Ready for You to Retire?
Most family business owners do not realize that they have only a 30% chance (or less) of successfully transferring leadership to the next generation or to a new business owner and an additional third do not make it to the third generation. There are multiple reasons that such a large percentage of family businesses never realize their founders’ dreams. The primary reason is that the family business owner has delayed planning for a successful transition until it is too late to make the changes that are needed to realize the full—and in some cases, any—value of their business. The secondary reason is that, even if they have started transition planning early enough, the planning that has been done inadequately addresses the nine factors that must be competently addressed to ensure a successful transition to the next generation or to the next owner.
To address this severe need of most family business owners, Your Business Legacy has developed its Business Retirement Readiness Assessment™. The Assessment will allow you to:
- Understand the thoroughness of your business retirement planning and what gaps remain;
- Know what decisions have to be made and when to make them;
- Identify the key advisors your business requires for a successful transition; and
- Know the next steps to take for your successful retirement from your business.
Elements of a Successful Transition Plan
There are nine critical components that must be planned for and successfully implemented to ensure your family business transition returns to you and your family the legacy you dreamed of when you founded your business. The ultimate value of a business legacy—especially the wealth you have created through your family business at the time of your transition of leadership—is critically dependent on nine factors:
- What you’ve chosen to do after you’ve transitioned your business to its new leader.
- What you’ve chosen to do with your business: move to the next generation, sell it, or liquidate it.
- How effectively you have created and grown the value of the business and the wealth you have created;
- The protective (legal and tax) shield you have put in place to protect and enhance the value you’ve created;
- The succession plan you have put in place—who will next manage the business. For inter-generational businesses, how effectively you’ve managed the dynamics within your family as you are planning your succession;
- What steps you’ve taken in the early preparation of the next business owner to successfully assume the leadership of the business;
- The ability of the business to sustain revenue and profits after you have transitioned leadership to your successor;
- The exit plan itself—the steps you will take to transition your business to the next generation or owner; and
- The effective implementation of your transition/exit plan.
These nine critical factors and their relationships are shown graphically as follows:
Business Retirement Readiness Assessment™
Through our proprietary Business Retirement Readiness Assessment™, we help you identify and assess the potential risk of all the key factors that contribute to the successful transition of your business to another family member or to a purchaser. The Business Retirement Readiness Assessment™ is a systematic review of the nine critical components (above) that must be planned for and successfully implemented to ensure your family business transition returns to you and your family the legacy you dreamed of when you founded your business.
The Business Retirement Readiness Assessment™ is a structured interview conducted with you personally and with one or more of your key employees and includes a physical walk-through of your business operations. The outcome of the Assessment is a detailed report to you that identifies what you have planned well and where more effort is necessary. It gives you a detailed road map of the next steps you will want to take so that you may effectively retire from your business with the peace of mind that comes from knowing your business will be in good hands with your successor.
For more information on the Business Retirement Readiness Assessment™ and how it can help you successfully retire from your family business, please Contact Us.
Have you already begun to think about retiring from your business?
How ready are you to take the next step toward retirement? If you’re not sure, then take our Business Retirement Readiness™ survey. It will take you less than 5 minutes, and you’ll receive a written assessment of how ready you are. Interested? Just click this link to take the survey. And there’s no further obligation!
If you’re not ready to retire, but just want to spend less time in your business, answer as though you’re planning your retirement—the actions you’ll need to take are the same! Click this link to take the survey.