Planning for succession (1)

Asset/creditor protection and the valuation of your business requires on-going attention.

By being proactive, say 5-7 years out, you are in a great position to minimize risk and maximize the value of your business.

The first step
  • If something happened to you today
    • who would run the business?
    • what income would you need?
  • Valuation-how much do you think the business is worth if sold to an:
    • outside buyer
    • family member
  • Do you have a Will or more importantly, dual Wills, power of attorney, shareholders agreement?
  • Do you have a strategic plan?
  • Who are the stakeholders in your business?
    • family members
    • key employees
Family Participation Plan
  • Criteria for family to enter the business
    • age,
    • experience
    • education
    • compensation
  • Who will have voting control of the company and for what period?
  • Training and supervision, mentor
  • Retirement
  • Marital issues, protection, transfer of ownership
Management buy-out
  • Qualifications of key employees
  • Do they get along with other stakeholders?
  • Are they present for the long-term?
  • Can they afford the purchase?
  • Are they insurable?
  • Do they have good leadership?
  • Are they free of baggage?
Improving the value of your business
  • Focus on growth prior to the sale
  • Evaluate discretionary expenses
  • Assess company performance to others in the industry
  • Document business decisions and operational systems to make transition easier for the purchaser
  • Remove non-operating assets at least 2 years prior
  • Purification, deal with tax issues
  • Debt restructuring
  • Restructuring shareholdings to maximize after-tax cash flow from sale
  • Transition team in place
  • Reference to CICA publication on Succession Planning

Succession Planning Services Kitchener & Waterloo

Oakville Succession Planning Services

Succession Planning Burlington & Hamilton