MovingON Action Steps

MovingOn Action Steps

The ultimate value of any plan rests with your commitment to executing the identified Action Steps. Some of the areas you will need to address, are detailed below and are provided with the hopes that you will dedicate the appropriate time to work with the proper advisors to successfully meet your Exit/Transition Objectives.

The process of transitioning a business can introduce increased stress and having unexpected issues arise. Since this is a unique and personal process, an owner doesn’t normally have a lot of experience to draw upon, in order to appreciate the significance that any one single issue may have on the overall transition plan.

EXIT/TRANSITION PLAN

You’ve taken the initial steps by completing the assessment questionnaire in order to better gauge your readiness as detailed throughout this report. Business exit and transition specialists are available to work with you in building from the sections of this report, and/or to assist you in creating a more comprehensive exit plan, solely based on your personal exit objectives, and then guiding you through the important steps of implementing it successfully.

The clarity of your objectives is critical! If you are not absolutely clear on what you intend to accomplish, and what you have defined as the emotional payoff you expect to receive upon its accomplishment, then your transition stage will suffer. Advisors can assist in several ways, each of which is uniquely designed to provide resources and expertise, which should help guide you towards completing your business transition successfully.

BUSINESS SUCCESSION

The process for improving the effectiveness of your key team members, will absolutely support and further advance your Exit/Transition objectives. An effective team that is able to function independently of the owner(s), will be one of your most valuable business assets. In essence, this should allow you to focus on areas of the business that are the best use of your time, to be away from the business when you wish, and to ultimately increase the value of your business during the transition process and upon exit.

BUSINESS VALUE

In order to accurately determine the value of your business for purposes of your overall ‘Financial Needs Analysis’ post exit, you may need to obtain a value calculation from an accredited business valuator. A business value calculation does not have to be the first step, but having it done, will be more important to determine the ‘Value Gap’; or in other words, knowing the current value of the business, compared to the projected business value needed to properly fund your post exit lifestyle.

PREPARING THE BUSINESS FOR EXIT OR TRANSITION

As you begin to prepare the company for your exit or monetizing event, regardless of your exit strategy, your goal should always be to maximize the positive impact of “Value Drivers” on the business. Here is a summary of many of the items earlier mentioned in various sections of this report:

  • A stable, management team which is effectively running the business.
  • Operating systems that improve sustainability of the business.
  • A solid, diversified client and/or customer base.
  • A realistic growth strategy along with appropriate action items to accomplish it.
  • Effective financial controls and management reporting systems monitored regularly.
  • Good and improving cash flow.

TAX PLANNING

Taxes are often unavoidable. The real question is whether you can discover ways to pay less or defer payments into the future. As part of a regular analysis with the help of advisors, we suggest you review the financial and tax issues related to the business. It will become critically important for you to understand the tax consequences of your exit plan, and then revisit it in order to take advantage of ongoing changes in the applicable tax laws, as well as to address changes in your business circumstances. Ultimately it is not what you get for the business that counts, but what you get to keep!

WEALTH MANAGEMENT

An important step in creating a Transition/Exit plan is to resolve the issues related to preserving your wealth, funding your post exit years, managing it and perhaps passing assets to your heirs. For business owners the issue of funding their post business lifestyle is normally quite complex. Surveys continually indicate, that a large portion of an owner’s total estate is tied to the expected value of the business and therefore the funds are not liquid. Your goal, with the help of qualified advisors, should be to initially create a strategy to manage your pre-transaction investments, and then coordinate having the realistic post transaction proceeds in accordance with your objectives.

ESTATE PLANNING

Coordinating your estate planning will help to ensure that your legal documents are aligned with your current financial and legacy plans. It will also allow you to then plan for contingencies, in case your exit from the business is premature and/or ‘involuntary’. These circumstances should be reviewed in conjunction with your current legal documents, in order to identify the required changes, along with any new documents that may need to be drafted by an attorney.