Business owner insights

Learn key steps to help prepare for a business transition.

31 Oct 2018

Key takeaways

  • Business transition plans should focus on maximizing the value of the business, wealth beyond the business, and living and enjoying life after the business.
  • After determining the value of their business, business owners should take steps to help revitalize and reduce business risk in order to improve that value and reap the benefits.
  • Preparing for a transition is not a simple process, which is why starting the conversation with a financial advisor can be crucial.

Business owners work hard to build and grow their business, but there may come a day when they want to walk away from it all to do something new. For such owners, now is the time to give a formal transition plan serious thought.

Our report, Planning towards a smooth transition (PDF, 1 MB), the first in our new series, Business owner insights, provides a framework for helping to drive the value of a business and taking it to the next level. It's not only about how to help grow revenue or income. It's about solidifying the value of the business to help make it appealing to buyers.

Improving the value of the business

A vital first step in transition planning is determining the value of the business. Once a reasonable range is determined, the goal is to improve that value and resolve any issues potential buyers might come across. By revitalizing and reducing business risk, business owners may be able to reap additional benefits, such as creating competition among buyers, improving negotiations and minimizing closing time. 

Here are eight steps to help make a business owner's business "market-ready":

  1. Get your business documentation in order
  2. Organize your financial statements
  3. Develop formal strategic plans
  4. Create business succession and contingency plans
  5. See that legal records are in good order
  6. Secure your leadership team
  7. Consider a formal board of advisors with outside members
  8. Minimize your business's reliance on you

Starting the conversation

Transition planning is perhaps one of the most complex tasks a business owner will encounter. However, many owners may lack a comprehensive plan to pass on their business. According to the UBS Investor Watch report "Who's The Boss," 41% of business owners expect to exit their businesses in the next five years—yet almost half do not have a transition plan in place. 

A crucial step in planning for a transition is simple: consider starting the conversation with a financial advisor. A UBS Financial Advisor understands the challenges and can help you on the journey, working with your other trusted professionals to help you feel confident that many aspects of the process are aligned, including your own personal wealth planning.

Start the conversation. Find an Advisor now.