Prepping for transition – www.designerstoday.com

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Family businesses typically have built-in successors; for other businesses, it is never too early to think about an exit strategy. Business coach Gail Doby advises to start considering transitioning at least five years in advance of your estimated departure.

“When you begin your business with the end in mind, you will accomplish more, and you’ll establish the correct structure for your eventual exit,” she explains. “You always need a plan for how someone else can continue your business in perpetuity, or you need to know how to prepare the business for someone to wind it down.”

Below, Doby asks questions you’ll want to answer when it’s your time to prepare:

  • Do you have a financial or time-related goal that is your trigger for beginning the process of transitioning your business to another owner or manager?
  • How can you maximize your profit and cash flow so the business is more attractive to a buyer, if that’s your plan?
  • Is there someone within the company that has the skills, interest and financial/time capacity to take over or manage the business?
  • Do you have a leadership team that can run the business so you are not so wrapped up in the day-to-day that you can’t sell the business?
  • How do you want to exit: sell it to an outsider or employees, close it down, or build a larger business by acquiring others and then sell the business for more money?
  • Do you have systems and procedures documented so someone else can take over and run the business with little difficulty?

This article first appeared in the January/February 2022 issue of Designers Today.