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":
- Get your business documentation in order
- Organize your financial statements
- Develop formal strategic plans
- Create business succession and contingency plans
- See that legal records are in good order
- Secure your leadership team
- Consider a formal board of advisors with outside members
- 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.