Hey guys,
Recently, i had to give up my post as the
President of E-Cell at IIPM Kolkata, so, with the help of my professors,
we figured out an Transition Plan which would help the E-Cell to be run by my
successors. While doing the process, I thought how important is the same thing
in business houses and specially Family businesses where matters such this are
often driven to courts.
Business transition is a process of
transferring business to successors. If it is done properly, it can be a really
profitable experience, handled improperly an owner can encounter many pitfalls,
regrets and financial reverses. It may become a nightmare. There are no second
chances in transitioning a business.
A formal business transition plan puts the
goals, priorities and strategies in place for a successful transition. Without
a clearly defined plan, business owners are leaving their personal and
financial future to chance. Then questions arise like "I know my
business the best, how can i transfer it" or "Will i do it
myself or are their professionals for it"
Well, This is a complex and personally
challenging process. It's very difficult to do it alone and get it right. If
you have legal, tax or risk management issues, you must use professionals
familiar with these areas to take care of them. Even if you have an
accountant, broker or financial advisor, they may not be uniquely qualified to
assist you with the transition. You need experts focused on business
transitioning. There are firms, such as The Monitor Group and its Transition Team,
that can work with you to identify the best choices for each expert. To find
experts who deal extensively with business transitions, seek recommendations
from your accountant, lawyer or broker, or try a local trade association in
your industry.
Experts can become involved at any point of
your transition. These experts can review the work you have completed, provide
recommendations and take the necessary actions to get you on the right track.
Even if you have completed your transition, a certified financial planner can
help with wealth management.
So, how to begin with it?
The four phases of proper business transition
planning are:
- Pre-Sale Phase
- Positioning for
Sale
- Transaction
Phase
- Wealth
Management
Following the above Four Phases of a
Successful Business Transition, use the following process to guide you through
your transition.
- Data gathering
(documents you need to begin)
- Initial Expert
Team Consultation
- Selection of
your team
- Creation and
Execution of the Transition Plan. (typically a 6-month to 5-year
timeframe)
- Successful
completion of the transaction
- Wealth
management system put in place for a secure financial future.
Cheers,
Akash Poddar,
akashpoddar@live.com
