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BUSINESS TRANSITIONS



ARE YOU PREPARED FOR YOUR BUSINESS TRANSITION?

It’s time to plan with the end in mind.

All of us appreciate the importance of establishing goals, creating plans to attain those goals, and persevering to see those plans through to completion. Yet many business owners fail to create a plan for one of the biggest transitions in their life – the exit from owning their business.

Why is that?

The most common answers we hear are:

“I’m too busy working in the business to plan ahead.” - “I don’t feel a sense of urgency.” - “I don’t believe my business has enough value.”

According to research, 80% of business owners believe that a successful exit from their company will result from planning and action items they implement, yet only 17% have created a written plan.

If you want to leave your business on your terms (meaning leaving the business when you want, for the money you need, and to whomever you choose), then you have to take time to determine a course of action for the transition to occur.

We are here to help you develop an exit plan that is based on your financial goals. Take a moment and read the case study below. Then give us a call. It’s never too early to start planning.

SVA Plumb Financial and SVA Certified Public Accountants work collaboratively on the components of a successful transition plan for your business.

SVA Plumb Financial will help you with:

SVA Certified Public Accountants will help you with:

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WHAT’S THE BEST WAY TO TRANSFER MY WEALTH TO MY CHILDREN?

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SVA Plumb Financial was the right choice for people like you.

Listen to an audio recording of how we helped someone with their business transition.

business transition

“Transitioning a business can be an emotional time for an owner and their family. Starting early provides time for a smooth transition to family, key employees or a third party. SVA brings a strong team approach to develop and execute a flexible transition plan. A strong succession plan empowers you to create a lasting legacy for your family.”

Tim O'Brien - MBA, CFA
Principal

The fast-paced life of a business owner rarely leaves you time to take a breath, let alone evaluate the state of your overall financial situation. But as one business owner found, if you make the time, you may find yourself with more options than you ever imagined.

In eight years, this small business owner grew his start-up company into one with $7 million in annual revenue. He began to sense that the size and complexity of his business was now beyond the scope of the advisors he’d hired in the past, so he met with SVA Plumb Financial and SVA Certified Public Accountants to see if they had a different approach.

Before developing a big-picture plan, the SVA Plumb Financial team asked the business owner about his financial goals, which they discovered were to live modestly in relation to his earnings. However, the initial evaluation of his business revealed that the client’s net worth was significantly higher than he had anticipated. It was an emotional time for the owner and his family when they realized they might be leading a much richer life with more choices than they had ever dreamed.

To ensure that the owner and his family could meet their newly realized goals, his SVA Plumb Financial advisor designed a comprehensive wealth-management strategy that included retirement planning, estate planning, and business and personal tax preparation.

Most significantly, the SVA team including SVA Plumb Financial and SVA Certified Public Accountants developed a formal business exit plan to maximize the value of this owner’s company. Working closely with the client, they detailed the steps toward a vision of an eventual sale.

This included:

  • Envisioning the eventual buyers. Did the client want to sell the company to his employees? Family members? A competitor?
  • Providing a current valuation of the company.
  • Putting value-building provisions in place to reach the client’s goals. This included providing the company with a temporary CFO as well as cleaning up the company’s financials so it could easily be transferred to another owner.

At the beginning of the planning period, the combined SVA team estimated the client’s business multiple was about 2.5, meaning that if he sold his business right away, he might be able to get 2.5 times its value, or $17.5 million. With a concrete value-building plan in place, the client was able to not only plan to expand his business in the next five years, but increase his multiple to 10. By the time he sold his business, his valuation would be closer to $75 million.

The SVA team can’t take the credit for the innovation and hard work of the business owner, but they were able to help him capture the growth arc of the company, compound its value and put the client in the position to sell it for much more than he ever imagined. Today, the client has the world open to him. He can retire or he can take on the next challenge. The choice is his.

Our expert team.

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