A business owner must always think about how their business will carry on when they are no longer in charge. Successor owner(s) can be family or current employees, but more often they are third parties that have no history with the business. The fact is a successor may have to be located and may not always be obvious to the current owner. Identifying a successor can take time and may require professional assistance from a business transition specialist or broker.
Regardless of how the successor is identified, the timing of the succession is probably of most significance. A business owner’s greatest chances for success in transitioning the business and obtaining the purchase price he or she wants for their business, comes when the owner is still very active in the business, is still growing its customer base, and is increasing or maintaining revenues. A declining business or one where the owner is absent, may or may not be attractive to a potential successor, and will likely result in a disappointing payout for the current owner.
Once a successor is identified, the sale/purchase may or may not take place right away. If the sale is delayed to a future date, then an entry plan for the new owner will not only prepare the business and the new owner for the eventual transition, but will also help promote the business and keep it successful after the transition has occurred.
The attorneys and staff at Thomas Law Group have years of experience assisting business owners in succession planning and eventual sale. Contact TLG to learn more.