Succession Planning Best Way to Get Top Dollar For Your Business

Growing up in a small business environment, watching your parents work harder and harder to make a good life for us as children I believe that my parents probably worked too hard and didn’t give themselves the opportunity to maximize the value of their businesses before retiring.

Succession planning should start earlier, not at age 65 when people retire, but several years before in order to determine an exit strategy which either passes along the family business to the siblings or to get the businesses ready for sale.  In Canada according to a CFIB (Canadian Federation of Independent Business) 70% of small businesses owners will retire in the next 5 years.  That provides 2 business scenarios for small business owners, one, that the businesses will be hopefully passed along to one of their siblings in order to quickly deal with the succession planning issue or two, that there will be a lot of small businesses coming up for sale.

But I believe that one of the biggest hurdles to succession planning is that small business owners who have had businesses for a long period of time actually think of their businesses as being part of the family like another child and there’s the emotional tug of war on deciding to give up the business even to their children if that’s the route they choose.  The more difficult decision is to decide to sell the business to an outsider and that’s probably one of the biggest reasons why people outside the business might view it as procrastination, but to the small business owner it could be more an emotional factor.  My parents were already past retirement age when they decided to sell some of their businesses and hang onto a few others.

This delay hurts both the employees of those businesses as well as the owners in that their is a definite lack of plan of going forward and the owner’s passion has already waned and they’re no longer really interested in running their businesses, but don’t want to necessarily letting go.

These businesses have been profitable but the owners’ have had a hard time taking time away from the day to day running of the business, or taking a step back to look at their business at the 10,000 foot level and trying to setup their business to become saleable at the most attractive price.

A study released late last year by business transition specialists ROCG Americas found only one in 10 owners received a price for their business near what they wanted or expected. The primary reason given was improper or lack of planning.

ROCG conducted the survey in North America and found that businesses with revenues between $1 and 100 million said that they were either too busy to plan for a business sale or it was too early to start thinking about it, even though 84% of them said it was important to their retirement plans.

“Many business owners are not aware of the complexity involved in the succession planning process, particularly in executing a divestiture transaction,” says Michele Middlemore, vice-president of Aon Corp.’s M&A Transaction Advisory Group. “Almost always, they underestimate the time and work and difficulty involved in getting something like that done. More often than not, they tend to postpone dealing with it and are not prepared adequately when the time is upon them.”

Businesses should be planning 2 or 3 years in advance for the divestiture.

One of the big ideas to put in place is the movement of the value of the business is from the business owner to that of the business itself.   Since small business owners are generally the drivers of the business, it’s usually been in the sales and marketing roles and this is one of the areas which has to be transitioned over to the company.  This is easier said than done, in that one quite often that there isn’t the bench strength to take over and this has to be brought into the company.  Their might be changes in technology which might be needed to brought into the company as well to allow to compete better.

One can look at the succession planning in a way is like embarking on a new business plan and here a corporate financial advisor can help with getting an independent valuation of a business to let owners know where the strengths and weaknesses lie and what to expect as a potential starting point for a dollar value of a business sale.

According to the Business Development Bank of Canada, business succession is a process that requires thought, planning and time to arrange and execute: “Whatever your definition of success, making the commitment to let go of the business and place it in the hands of someone else is perhaps the critical factor that ensures your business transition goes smoothly and profitably,” the bank notes.

Just remember though that succession planning shouldn’t be determined by what the economy is doing or the stock markets, but by personal circumstance, if you’re ready to retire, then you should be planning for it in advance by 2 to 3 years.  The process is a complex one and is similar to building a new business plan, except that you’re trying to help build for the next set of owners’ to succeed and by doing so you and your family will get top dollar for your business you have built over the years.

Written by Richard Wong, CMA [email protected]

Do You Need Consultation in Starting Your Own Online Business?

The world is run by money and business. People, who know how to do business, know how to earn more money than most people. The difference in the world nowadays is that most of the population is busy finding employment or working. These people often tend to start doing business after retirement. The world needs money to survive and one way of earning it is either finding a job or starting a business.

There are many business opportunities that can now be found online. This made others to start their own online business. Starting your own online business is easier than other businesses. This is because it you can take your business as far as you want to go and you can do it anywhere. You can get business planning assistance if you are not sure what to do. There are also many available business ideas in the online.

These ideas are very useful to get you started in planning what business you would want to do and what business really suits you. Most housewives who have access to the internet now have discovered that they can also earn a living even when they are at home taking care of their families. Home business opportunities abound through the help of the internet. When you engage in online business you can decide how many hours in a day you’re going to spend on your business.

If you want a larger market you can use the internet to advertise your products or services. This then generates more work and income for your business. Internet nowadays is not just a means to find new friends and lovers; it is also a good way to find new clients and consumers that will use your products and services. This is also a reliable way of communicating to people, especially your clients. Placing orders on the net is now possible and deals are sometimes done today through video conferencing.

When the business goes bad, you can easily find people online who offer online business consulting. This gives you more options on how to find the right business solution for your problem. It not only gives you more contacts or advisers, it also expands your network, which in turn, helps spread word about your business. Getting online business assistance actually gives you more options because you can get more than just a second opinion.

Business is always good to have around to give you income. You can also get money from doing what you love doing the most. The good part about the new changes in technology and the times is that it has brought business to a new level. It has brought business on the internet. This gives virtually everyone, the opportunity to improve their living conditions and aspire for something more by creating and starting their own business online.

Want to Start a Home Based Business?

Want to Start a Home Based Business? Here are some tips you should know

I have been a mother working from home for about 7 years now and have thrived in the flexibility that this working lifestyle has given me. I spent years wondering where my children were and what they were doing.

Now I work when I need to, how I want to. I no longer trade time for money like I use to when I was working weeks of long hours. The life style I have just would not be possible working in those traditional parameters.

It allows me to run my children around town, attend various school activities and still have an adult life of working and earning a very decent wage!!

The web has opened up the world to Online marketing opportunities, its no longer constrained by physical locations and slow communications.

Just the other day I overheard fellow mothers talk about how they could not attend their son’s award presentation because they had to work, and got to thinking how lucky I was!

Until I thought…no I’m not lucky, anyone can do this! You just need to know how, so here it is, the keys to starting a successful home based business:

Choose a Business Opportunity

Use the web to search for a business opportunity that might suit you. Make sure that the business meets the key features of an online business opportunity.

  • The product of the business should be unique and in high demand
  • The business needs to be financially beneficial to you through its compensation plans
  • The business must have an established and proven marketing system
  • Training and support must always be available at all times of operating your business
  • The business must be expanding
  • A top online business opportunity will have a credible management.
  • Have a look at the businesses bigger picture.

You can read about these in more detail on my Blog

Create a budget for establishing the business and keep accurate records

  • All top online business opportunities cost to set up and run. If you come across a “free, get rich scheme” RUN!! There is no such thing. Some legitimate online businesses will offer a guarantee, or a 30day trial period, and that’s fine, the basic truth is that they will all cost money. So establish what you can afford and stick to it.
  • Investigate the various marketing methods their cost of effectiveness. A list and explanations of some marketing Techniques are listed on my blog.
  • Make sure that you run the books of your business as you would any other. This includes opening a business merchant account where all your earnings will be deposited and expenses withdrawn. Savings are important to have held for slow times (and they do occur!)
  • Make sure you keep accurate records and keep receipts for Taxation purposes and your accountant. The government has a history of auditing home businesses more often.

Make sure that you get training and Support with your business.

  • Another reality of online home businesses that you might not want to hear but is important for you to be aware of is that 97% of online businesses fail!! These fail because these businesses did not support the would be entrepreneur. Unless you are a highly experienced online marketer you will be killed in this industry unless you have a proven turnkey marketing system behind you.
  • You have to understand the importance of leverage and advantage of marketing duplication. Make sure that the business you enter into has a good system behind it. Read lots and always listen to top producers!!

Your home work space

  • Make an area that is your own workspace. Make sure it is spacious, bright and well ventilated. It is a space that you need to spend some time in so it has to help you to emit a professional persona.
  • Have a dedicated fax and phone line to this area for your business so that you can keep a professional image. Use an answering machine for this line as well.
  • Rent a post office box and use that address on your promotional mail and stationery, doing this will make it less obvious that you are working from home. The professional image you portray is very important to your clientele.

Establish a Weekly Plan

  • Working from home has its own challenges, even though it creates flexibility it has can be too easy to “put off” work. Your have to be highly disciplined to operate a successful home based business. Make a weekly plan and stick to it religiously.
  • Affiliate yourself with like minded home business professionals. The support is so important when you are establishing your new career. Make sure you family are aware of your new venture and are respectful of giving you quiet work time.

Establishing a successful home based business takes discipline and commitment. With this comes flexibility and freedom. No longer constrained by the nine to five hours of the traditional working week you can open your life up to all that you have been missing, your kids, your spouse, your family!

Forget wondering what your kids are doing and where they are take the plunge, make the change you will not look back! Need to see more? See the business I am operating and gain some incentive to set yourself up on your path to freedom.