Rather than a single, dramatic movement, the smooth succession of a business more resembles a flow of events that occurs over time. Like a well-run relay race, the handing over of a company to a successor should be graceful, carefully strategized and well executed if it is to be successful.
The selection and training of a successor will all be for naught if you don’t also develop a financial strategy for handing over you business. A financial strategy protects your company, your family and your employees against a monetary burden that could doom the entire process to failure.
No matter who inherits your business, it’s critical that you get an accurate valuation of your business. Such a valuation encompasses tangible assets such as real estate, buildings, machinery and equipment, as well as intangibles like employee loyalty, manufacturing processes, customer base and business reputation, patents on products and new technologies.
Your successor should help determine the method you use for transferring your business.
Here are some of the ways you might arrange for the financial transfer: