Apple Growth Partners

The Time is Now: Transitioning Your Business

Healthy Growth Blog - Transitioning Your Business
By Brandon Fredericks, CPA | Principal


As of June, Refinitiv reported that global mergers and acquisitions had totaled $2.4 trillion in 2021 so far. This is the highest year-to-date total since Refinitiv’s records began in 1980, and is up 158% from the same time last year. Refinitiv also reported that in the fourth quarter of 2020, values were up by 18% compared to the prior year at the same time. Interest rates are at record lows, and investor and consumer confidence are growing as vaccine rates do. If you are considering transitioning your business, the time is now.

Where do I begin?

Create a plan for your financial future.

If you’re planning to retire or sell, consider what will serve you well in the long term. Work with your financial advisor to determine your ability to retire, a bottom line, and whether you should consider options like remaining on the board of directors or retaining certain assets (like property) in order to continue receiving income.

Know your options.

When transitioning your business, there are several options for a succession plan. Consider which is best for your business. Options include gifting or selling the business to family or employees, an employee stock ownership plan (ESOP), selling to a financial or strategic buyer, or stepping away from day-to-day duties while maintaining ownership.

Know the (realistic) value of your business.

A sell-side quality of earnings report is an independent analysis that can help you understand how buyers will view the value of your business. This will eliminate surprises, disclose any potential issues, and can serve as a checklist of items to address prior to sale.

Prepare your team.

Make sure that your management team is ready to carry on without the owner after sale. Spending time now to empower your team and delegating key aspects of the business will position your Company well for potential buyers.

Work with experts.

The sale of a business involves complex legal and tax implications, and a slight error can result in significant financial consequences. Work with a team of experienced attorneys, accountants, wealth management advisors, and valuation experts to maximize your value, make the process efficient, and eliminate any issues.

Get ready for sale.

To prepare for a sale, and to make your business appealing to buyers, you will want to complete a few steps. These include completing a business assessment, eliminating or reducing legal liabilities, cleaning up your financial statements, and obtaining non-compete agreements from employees.


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