 Unfortunately, when it comes time to take the next step in life, the gravity of
letting their baby go can prove overwhelming, say Kathleen Richardson-Mauro and
Jane M. Johnson, two business owners who specialize in helping CEOs plan and
execute their business ownership transitions.
"Successful business owners tend to pore over every detail in order to
improve the venture; but what they often overlook is the fact that, like parents
to a child, they will someday have to allow that baby to move on," says Johnson,
co-author with Richardson-Mauro of a practical new guide, "Cashing Out of Your
Business," and a complementary website of self-help resources, Business
Transition Academy (www.BusinessTransitionAcademy.com.)
"As business owners, we've both experienced difficult transitions
professionally and personally," Richardson-Mauro says. "So many CEOs, rather
than dealing with the reality of their business's future without them, carry on
as if nothing will change."
Richardson-Mauro and Johnson, both certified in merger and acquisition
advising and business exit consultants, say there are a number of measures
owners can take to ensure the transition is smooth and they have what they need
to be happy on the other side of it.
LIST
If you're like most owners, you
have invested some or most of the best years of your life, and most of your
financial resources, in your business. By now, your identity and that of the
business may now actually be one and the same. Take heart: Now is the time
to focus on your other passions, which may be family, traveling, catching up
on reading, fitness and so much more. Consider your next act as a rebirth of
you.
Learn to count beans — outside
of your business. Now is the time to take stock of the assets you've
saved outside of the business and determine how much income you'll need
post-transition. Then, calculate how much money you'll need to receive from
the ownership transition. Most owners are not independently wealthy without
their business; most need to extract money from their companies to fund the
rest of their lives. The more a business profits, the more owners tend to
spread the wealth to family members or ratchet up spending in other ways. Be
realistic about how you want your money to be spent in the next phase.
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Is your business
transitioning "in-house"? Small businesses — those with less
than 500 employees — are responsible for nearly half of the
gross domestic product, or GDP, and employment in the United
States. Many of these are family-run enterprises. Naturally,
owners often want to keep it in the family, which doesn't always
work out. Often, parents want to distribute evenly to their sons
and daughters, even though only one was actually active in the
business. Attempts to be "fair" can cause businesses to crumble,
with an absentee owner trying to call the same shots as someone
who's always there. Be honest about what will actually be good
for the business and its employees.
___
Kathleen Richardson-Mauro, CFP, CBEC, CM&AA, CBI, has owned and
operated five small companies and has successfully assisted more
than 150 business owners in achieving their transition goals.
Jane Johnson, CPA, CBEC, CM&AA, owned her own business, which she
exited successfully in 2007. Since then she has been providing
advisory services to business owners on how to plan and execute
successful ownership transitions. In 2010, Jane received the
Excellence in Exit Planning Achievement Award from Pinnacle Equity
Solutions.
[Text from file received from
News and Experts]
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