Setting a course for the future of your business is a team sport. While many of the decisions you’ll have to make will be deeply personal, a trusted crew of advisors can help you make them more confidently.
So, who are the people you need around the table? Identifying them by name comes later. Let’s start by pinpointing their areas of expertise.
Keep in mind every sale is different and may require unique or specialized expertise. From a generational hand-over to a strategic buy from a competitor, there are literally hundreds of forms a sale can take. That said, these eight experts are foundational to a successful transition and should be involved whenever possible.
You will notice each of the below is capable of contributing not only during the planning phase, but also during and after the actual sale of your business. This is really critical, as you want the people or firms you’ve involved to transition easily from plan to execution. The last thing you want during hand-over time is the added challenge of recruiting a whole new team.
CPA: This team member’s job is tax planning for both the buyer and the seller of the business. He or she can also set future tax strategy to grow the company into the future.
Law Firm: Your attorney will draw up the necessary documents for the transaction and the new ownership structure. They will also help manage the development of future documents for ownership and planning. If you are buying with a partner or partners, a buy-sell agreement should be considered.
Insurance Partner: Special coverage, such as key man insurance (or life insurance on the key person in a business), may become necessary during your transition. This individual will be responsible for both researching and outlining those needs based on what the other parties around the table require. He or she must also take charge of understanding how past coverage may need to evolve going forward.
Investment Firm: This group will not only help the seller put a solid plan in place for the proceeds of the transaction, they will also help the buyer understand the ramifications of different investment opportunities ahead.
Estate Planner: This will be an important perspective to have in the mix for family-based transactions. This individual or firm will help family members determine their collective goals and then execute – for generations to come.
Commercial Banker: Even if the buyer purchases the business with owner financing (sometimes called a carryback note), rather than bank financing, it will still be crucial for the new owner to establish a solid banking relationship from Day 1 (sooner, actually.)
Cash Management Consultant: Now may be a good time for new ownership to implement services that increase efficiencies and address risk. A cash management consultant can advise which services stand the best chance of increasing margins and paying down loans quicker. For example, moving payroll and vendor payments away from checks to ACH (Automated Clearing House) creates efficiencies for the business while getting money to employees and vendors faster allows a client to become more efficient when disbursing money and employees and vendors to receive payment in a timely manner.
Branding/Marketing: This is not a competency every business thinks through as it transitions, but it can be incredibly important to ensuring your business’s reputation remains intact and is well-positioned for the change that will inevitably accompany new ownership. This person or team will be very important to have at the strategy table from the outset so they can guide branding and communications efforts as your stakeholders learn what’s ahead.
Choosing the people who will fill each of these slots should not be rushed. While some of your existing relationships, including your internal people, may fit nicely, others may not have the right mix of expertise and experience to usher you through a transaction as delicate as a change in ownership. One method you may consider is tasking your most trusted partners with rounding out the team. After all, each of these people / firms will need to work together closely, so they may be the best judge of who should fill any open spots.