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You are the current owner-manager, also know as the assignor.
You are thinking about passing the torch or it is time to start giving it some thought.
The primary decision concerning continuity is yours to make, whether you are thinking of selling to a third party, to your children, to company executives and employees, or to liquidate.
It is an open secret: one day you will retire. Your children, your business partners, your company's management and employees, as well as your clients, your suppliers and your bankers all hope hear this message from you: "This company has a future. I am taking care of it."
It is time to:
- Start thinking about it
- Choose and convey your preferences
THINKING ABOUT IT FIVE FUNDAMENTAL – QUESTIONS FOR THE OWNER-MANAGER
The answers to the following five questions come from deep within yourself. At this stage, it is a question of focusing on what you really want.
- What are the reasons that make you think it is a good idea to pass your company on to someone else?
- What type of succession do you envision?
- A family succession?
- A take over by company management and employees? There are advantages and challenges in a Management Buy-Out.
- A sale to a third party?
- A combination of these three options?
It is important that you give yourself enough time to think at this stage. Do not forget that, regardless of the option you choose, the best solution will be the one that is most appealing to you and suits your needs.
- What role do you wish to play after the succession, and for how long?
- What purchase model do you prefer?
- Do you have plans for your retirement?
CHOOSING AND CONVEYING YOUR PREFERENCES
Once you have answered these five fundamental questions, sketch out the scenarios that best correspond to your preferences.
Next, talk about your plans to the people who are likely to play a role in your preferred scenario: your family members, the company management and employees, the companies in your business environment, the members of the board of directors, your accountant, your legal advisor, your banker and other financial partners.
Precisely determine your criteria. Who has the necessary skills? Who has the necessary funds? Who will let your retire at the time of your choosing? With whom are you ready to work side-by-side during the transition, if that is part of your plan?
To promote communication, first speak to the targeted individuals and seek assistance. You will have to make some major decisions, so look for support from your friends and close family, people you respect, and people with the specific skills to assist you in the process for support.
