Q: 

Where do I stand? What do I need to do?

A:

Business Transition Audits - A Place Start

When starting a Business Transition Plan, the two questions you have to answer are:

1.  Can the business support the varied financial needs of the owners and employees as well as the cash flow needs of the company, in the future
2.  Can the people support and grow the company in the future?

The only way to get the information critical to forming a Business Transition Plan is by conducting a Business Transition Audit.  This audit has two primary components, (1) financial analysis and (2) management analysis.  The first question is tackled by a detailed examination of the company finances, in which the cash flow needs of the owner, business and employees is examined.  The second question, sometimes called the “soft side” (which frankly is the real hard stuff) is answered by examining the bench strength, aspirations and commitment of the key employees.  By this we mean sitting down, one on one within a confidential framework, with key employees and interviewing them (family and non-family).

Deliverables

At the conclusion of the project, Avastia Business Transition Team will thoroughly brief the owner on the readiness of their company for transition to a new beginning in terms of leadership and future prosperity.  Owners will understand the steps to be taken to accomplish their goals.  We will provide a written roadmap for achieving the goals of the owners in the coming transition and identify precisely how we will assist them in overcoming the obstacles that stand in the way.

Q: 

Why are Valuations and Business Succession Planning so important?

A:

Whether you want to keep your business in the family, or to sell your business, whether to insiders or outside buyers, knowing the value of the business is critical.  Why?  To get full value for it if that is what you want.  Or possibly to make gifts if you want to retain it for the family.  For establishing a buy-sell agreement, too, if that is part of the strategy.  The point is, none of your advisors can really counsel you without knowing what the business, as well as the rest of your estate is worth.  Also, having a benchmark to measure future growth is good for the next generation of owners.

If you want to keep the business in the family here are questions that need answers:

Who will run it?
Who should have control?
Are they capable in terms of skills and leadership?
Are you willing to risk your retirement income on what may happen?
What about the non-working children and equalizing the estate?

If you want to sell the business here are questions that need answers:

Who will buy it?
How much will they pay?
Can you get cash without giving up a lot?
How do you groom it now for more value in the future?

Not surprisingly, many businesses could have been retained in the family or with key employees instead of sold to produce the owners their needed retirement income.  There are a number of ways to keep or sell your business and each can present a set of planning obstacles like:
 
1. Preparing new owners for successful leadership
2. Income and estate tax issues
3. Retaining key people
4. Preserving family harmony
5. Providing retirement income for you
6. Providing opportunities for your successors in the future.

Avastia Business Transition Team will consult with you to get an evaluation of your business and build an appropriate business succession plan based on your objectives.