indicatorSuccession Planning

Setting goals during the transition planning process

By ATB Financial 16 February 2021 4 min read

When a business owner decides to exit their company, whether as a sale or a family transition, they should recognize how much smoother their transition will be if they lay out specific goals and deadlines.

We spoke to Amanda Vella, senior director, Business Advisory and transition consultant at ATB, to learn more how to make business transition planning successful.

Tax plans, training management, accountability

Starting as early as possible with identifying the goals for transition planning will ease the anxiety of undertaking the many tasks ahead, advises Vella. Start with 90-day sprints on what you have to manage. It also helps to select five personal and five business goals to accomplish, she adds.

“For example, on the personal side, one 90-day sprint could be to get your tax plan in place, and what you need to cover in that plan to make retirement easier for you,” she says. “On the business side, you should look over customer contracts, vendor agreements, and document the processes you did in order for the next successor to understand what’s needed.”

Leaders may also want to train management, in bite-sized chunks, on all aspects of the business so no one is left in the dark when new owners begin to run the company.

“If the management team can run the day-to-day operations and have relationships with key vendors and suppliers, that is what is important to a new owner,” Vella says. “There shouldn’t be a reliance on the previous owner.”

Establishing a culture of accountability will strengthen the succession planning process too. “Conduct monthly accountability meetings after certain tasks have been assigned so the management team is expected to execute what they need to do by a certain date,” says Vella.

Valuation and preparing for a sale

For some business leaders, they’ll be exiting their position due to a sale, which requires diligence on a variety of matters. Preparing for a valuation can also help optimize the sale value of your business. You want to ensure it has good growth prospects, a record of profitability and a reliable balance sheet. You may need to clean up the business and remove personal expenses from the books and work with an accountant on how to structure the sale to minimize your tax liability.


“You don’t want buyers to get into the business they just acquired and see that it’s crumbling, that divisions are short-staffed and they have to go hire to get back to normal operations,” says Vella.

“Buyers can see through slash and burn-type expense cuts to attempt to increase the valuation. Showing longer-term proof the company can function just fine with the operational efficiencies is more likely to translate to improved valuations.”

Valuing businesses is a specialized skill and you may benefit by hiring a chartered business valuator. Vella recommends a certified exit planning advisor or transition consultant that can help owners prepare their company and help them find the right advisors to support their existing advisory team.

Being clear about post-succession plans

If an exit is the beginning of the business owner’s retirement, they will suddenly undergo a shift in their daily routine once it happens. No longer will they be juggling the many facets of running a business, as overwhelming and engaging as that may be. Retirement planning means acknowledging and planning for what will occupy your time during those sunset years.

Vella remarks on how owners can go from working up to 80 hours a week to relaxing poolside, which can be jarring for some former executives. “At first you might experience nostalgia, and then really enjoy that you don’t go into work every day but that can get old quickly,” she says. “Going from 80 to zero hours of work isn’t easy.”

She suggests exploring life after business planning, which focuses on how you can leverage your expertise or connection to a certain community and offer those around you insights they might treasure from someone with your experience.

“Maybe you can try putting more energy into charities or helping advise other businesses, in order to find purpose and meaning in your retirement life,” Vella adds.

The Exit Planning Institute suggests to owners, “You manage value throughout the course of your business lifecycle, but the most important time to manage your value is after exiting your business. To achieve the most value, you have to manage not only your business value but your personal and personal financial value as well.”

The key takeaways Vella wants to stress to all business owners embarking on transitioning away from their company are to set clear goals, start as early as possible, and don’t venture into this process alone. The more you can prepare before the departure day arrives, the better you’ll be set up for a stress-free exit. Plus your business will thrive thanks to your foresight and hard work.

Find out more about selling your business successfully with ATB’s Business Transition Guide. Want to talk some more? For tailored advice around business transition planning reach out to our Business Transition team at atbwealthtransfer@atb.com

Business Transition Guide

Learn the steps you should take to successfully sell and transition out of your business.

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