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  • Transition Time

    Game Plan

    In-Depth

    Making a Transition Plan

    And you thought creating your initial business plan was a big undertaking? If you’re ready to sell, it’s time to create your transition punch list. And expect it to be a long one.

    One of your first tasks should be to build the right transition team. You should agree on which responsibilities of the transition you want to take on, and which are best handled by other professionals. Your transition plan should cover all the legal and financial angles, including employee and vendor contracts. If others have an ownership stake in the company, they’ll need to be completely on board with the moves you’ve determined. If you can, get all decision-makers in the same room to hash out the details.

    If you’re staying on as a consultant after the sale, make sure that your roles and responsibilities “under new management” are clearly and contractually set out.

    If you’re launching a new business, you’d better get started on that punch list.

    … And particularly if you plan to retire, don’t be surprised if your transition into greater freedom is a bit rocky—emotionally. You’ve probably invested a lot of yourself in your business, and leaving it behind may not be an easy transition, at least not at first.

    Game PlanGame Plan

    Game Plan

    • Does each member of your transition team have a precise understanding of their role?
    • Have you worked with your financial advisor or planner to project allocations for the money you’ll receive from the sale of your business? You’ll want to discuss your retirement goals, current debts, and financial responsibilities—as well as your risk appetite.
    • There may be tax strategies you can tap to mitigate the amount of capital gains that go to Uncle Sam. Consult with your CPA.
    • What is your plan for the first chapter of your new life? Are you starting a new business? Taking a long sabbatical? Whatever it is, make sure you have a plan for that, too.