How-to

Who to transfer your business

How-to

Monday, May 9, 2016
Presented by
Whether you haven’t yet considered who will be taking over the reins of your business or you’ve already identified a successor, you need to have a clear understanding and carefully review the different possible business transfer scenarios. In fact, depending on the choice of person who will take over your business, you’ll have to address different challenges. Review these different scenarios so as to better understand what to consider when the time comes to transfer your business.

Here are the most common business transfer scenarios:

  • Transfer to family

  • Sale to management or employees

  • Sale to a third party

  • Sale to an associate

  • Gradual wind down.
     

Tips for transferring to a family member

  • Make succession planning a family project. Get family members who work at the business involved and together create a transfer plan and business development plan. This is a great opportunity to assess their leadership and ability to work as a team.

  • Choose your successors based on your criteria as well as the technical, administrative and management skills and current stage of development of the people you're considering.

  • Keep peace in the family by setting up a family council and bringing in a management coach.

  • Make a list of the knowledge you want to transfer and institute a knowledge transmission and acquisition process that follows a training plan.

  • Specify the role the new owner will play during the transition.

  • Sort out your finances so ownership can be transferred smoothly when the time comes.
     

Tips for transferring to employees

  • Choose your successors based on future management's criteria and the roles and responsibilities outlined in the succession plan.

  • Assess the leadership, strengths and weaknesses, and technical, management and administrative skills of your chosen successors. Suggest a personal and professional development plan tailored to their needs and the needs of the business.

  • Expand the business in accordance with its challenges and needs: update the business plan, create the right conditions for obtaining financing for the transfer and other growth projects and make sure these initiatives are feasible.

  • Determine the transferor's place in the business based on the role he or she will play during the transfer (mentor, ambassador to financial partners, customers and suppliers, lender).

  • Envision desired stock ownership scenarios.

Employees may also suggest setting up a worker shareholder cooperative in order to purchase and hold a block of shares so they can help finance the transfer. A whole different set of procedures needs to be followed for such a process.

 

Want to know more?

Read the full article on Desjardins’ website

 

Keywords :How-to,family business,transferring a business,sale a business,buy a business