There can be many advantages to selling a business internally, but there can also be some challenges. One of the main challenges is maintaining objectivity about the situation, including your potential successor’s capabilities and whether they align with the needs of the company. If you plan to transition your business internally, make sure that you take the time to properly evaluate your potential successor(s) and develop his or her business and leadership skills well in advance of when he or she will actually take over the business. Some managers are fit for future leadership, and possibly ownership, while some are not. Going from an employee to an owner is an interesting and tricky process that can be a challenge even for the most skilled manager.Read More
Topics: family business planning, Business Ownership Transition Planning, succession planning, business ownership transition success, choosing a successor, Grooming a successor, passing business to my family', family business challenges, family business successors
We would like to invite you to join us for our upcoming BTA Transition Partner Program webinar, The Importance of Strategic Planning and Leadership Development for Next Generation Successors in Family Business Transitions, on Friday, May 13 at 2 pm EST. During this webinar, we will be joined by Marvin L. Smith, President of Deliberate Synergy. We will be discussing the importance of strategic planning and leadership development for next generation successors in family business transitions.Read More
Successful Transition Planning Institute and Business Transition Academy are pleased to host a free seminar on Thursday, March 17, 2016 from 7 am to 10 am in Burlington, MA: "Succession Planning: Why Business Owners Often Don't Get it Right and How You Can." It's designed for business owners and financial intermediaries who are either contemplating/planning an exit strategy or advising about the same. We will be joined by two experts in the field who will share their experience and recommended strategies with entrepreneurs. You can learn more here: https://www.eventbrite.com/e/business-succession-planning-tickets-22173191613.Read More
Selling or transferring your business internally rather than externally generally offers a distinct advantage: you already have an identified buyer or successor with a working knowledge of the business and an interest in acquiring it.Read More
Topics: Selling Your Business Internally, Internal Transfers, succession planning, internal sale of your business, choosing a successor, selling to your employees, Grooming a successor, passing business to my family'
Selling your business to an insider is definitely a process, not an event, even if you are selling to family members or an existing partner, as we discussed in Selling Your Business Internally: Ensure Your Legacy Continues.Read More
Topics: Selling Your Business Internally, succession planning, selling your business in 2016, selling business to managers, selling to an insider, selling business to employees, selling your business to family
Many business owners would prefer to see their business go to someone they know, such as key employees, partners, or family members in order to ensure that their legacy continues. Others may want to sell to an outsider. But given the dismal 20% to 25% average success rate of selling privately held businesses to outside buyers, many owners may not have that option. They will be forced to sell to an insider in order to liquidate or “cash in” on some of their wealth in order to fund the rest of their lives. An internal transfer or sale may provide a better option for owners to achieve their financial and non-financial long-term goals.Read More
Why are Family Businesses important to our economy? 95% of businesses in the US today are family-owned or closely held. 80% of those businesses have 20 or fewer employees. However, these businesses are responsible for contributing over 45% of our GNP (Gross National Product)! These vital members of our communities generate more new products, create more new jobs, and contribute more to your local communities than their corporate counterparts! However, almost 35% sell or liquidate – often failing to realize their intended value.Read More
This story is about a very successful family business that had been around for more than 25 years. Some long-term employees were just like family. The owners, a husband and wife, had a grown son and a son-in-law working in the business. All three families were dependent on this company for not only a sizeable income but also health insurance, vacations, travel, and many other perks. This company was operated as a C corporation and all of its assets, including substantial real estate, were held inside the one corporate entity.
Business owners put off internal transition planning for many reasons, as we talked about in Top 3 Reasons Why Business Owners Don't Do Transition Planning. As a business owner, you've spent much of your life building a successful business, and it's probably difficult to think about passing it on to someone else. And oftentimes, owners become overwhelmed just thinking about it. However, the reality is, you will leave your business one day, whether it’s voluntarily or not. You may leave due to retirement, disability, or even business failure. Unfortunately, many business owners believe they can worry about a business transition plan at another time only to find out the hard way that later is too late.
Selling your business requires the assistance and expertise of professional advisors who specialize in business transfers. However, regardless of the type of sale you are contemplating, the first step is to prepare a Business Ownership Transition Plan TM —a comprehensive written document that outlines how and when the ownership of a business will be transferred to others, either internally or externally, in order to achieve the owner’s goals. This process will assist you in determining the best sale method.