Strategies for an Effective Business Exit
By Mike Thompson
In this blog I want to address the issue of the large number of baby-boomers (born 1946-1965) who own Canadian small-to-medium size enterprises (SME’s – businesses with revenues ranging from $5M-$30M) and are at a critical point in their careers as they consider retirement.
Baby Boomer Transition
The SME sector in Canada is extremely important to the Canadian economy in terms of jobs and economic growth.
To ensure effective business continuity, owners reaching retirement age must identify and develop a succession plan for the next generation of leaders.
Strategies to Achieve a Successful Business Exit
The fundamental question is, “How can baby-boomer business owners plan to transition out of their businesses?”
Through years of extensive primary and secondary research for Business Diagnostics, I reviewed the main business continuity challenges baby-boomers face as they contemplate retirement. Presented in my paper Strategies to Achieve a Successful Business Exit, I have developed and tested an effective, three-stage Business Transition Process for small business owners to achieve a sustainable succession structure and a financially rewarding exit.
The three elements of the Business Transition Process are as follows:
1. The Situation Assessment provides the tools to assess your company based on your unique situation.
2. Transition Pathway Review and Selection presents options and potential pathways to follow for each individual set of circumstances, along with pros and cons.
3. Transition Plan and Implementation demonstrates how to implement the pathway you have determined to be the right choice for you.
I hope that a positive outcome of this paper will be increased dialogue and awareness around SME succession challenges. My intent with the Business Transition Process is to create a useful road map for business owners to use and navigate their business exit with more confidence, and get professional support as needed.
The various insights presented will also resonate with families, external advisors and internal management teams.
How are you planning for your and your businesses future?
Mike Thompson is a Fellow, Certified Management Consultants (FCMC), Associate Faculty at Royal Roads University and co-author of Business Diagnostics, a business book providing a simple methodology to size up a business. Check out Mike’s lesson on Assessing Corporate Health in Elevate, Zada’s online course for business owners.
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