Finding the right answers requires asking the right questions. This commentary:
- poses twenty ‘right questions’ business owners should ask in the contexts of their business & transition success prospects.
- suggests how business owners and their advisors ought to interpret owner-specific answers.
- urges advisors to ensure business owners clients learn of, and thoughtfully answer, these questions.
The image that heads this commentary
One might come to believe If one reads articles, commentaries and books regularly published on the subject of business transition it it more often than not means generational transition of business ownership and management.
Of course that is not the case. Rather ownership transition for any business – an inevitability, the only issue being one of timing – means transition of ownership pursuant to an:
- an arm’s length sale of an entire business.
- an arm’s length sale of part of a business be it a subsidiary, division, grouping of assets, or individual assets.
- a transition in a family-controlled business from one generation to the next
- a combination of generational transition where parts of a family-controlled business are from time to time sold in one or more arm’s length transactions.
- in the extreme, a liquidation which is an ‘ending’, not a transition.
The ‘arrow image’ that accompanies this commentary was chosen because it conveys the idea of multi-faceted advancement over time – something that in my experience is an important hallmark of successful business transition.
Business Transition Questionnaire
Over the past two years I have developed a very structured questionnaire that helps business owners identify – and then address – weaknesses in their businesses that are likely to militate against them successfully building the value of their businesses and successfully transitioning them. The questionnaire currently includes 297 questions divided into 8 topically organized parts that are further subdivided into 37 sections.
The questionnaire – a continual work in process – has been successfully beta tested with several business owners, each of whose businesses is thought to be worth in excess of $10 million.
The twenty high-level ‘right questions’ that follow have been taken from that much longer questionnaire. Anyone interested in learning more about the questionnaire I have developed is welcome to contact me at email@example.com.
Business viability and transition: twenty high-level ‘right questions’ and related commentary
I believe it is important that business owners – preferably in concert with their advisors – answer the following twenty questions. Answered honestly, I believe these questions collectively may prove to be the catalyst that wakes many business owners up to the importance of addressing ongoing business viability and transition planning and execution now – as opposed to simply postponing business transition’s inevitability.
I have included comments/suggestions as to how owner-specific answers generally ought to be interpreted. These comments carry with them the caveat that there are exceptions to most generalizations.
Advisors: organize a meeting with your business owner clients and their other advisors
If business owners currently are not engaged in near- and long-term business strategizing and transition planning they should be. World economics, business and financial markets are changaing before our very eyes.
I recommend that advisors to business owners consider organizing a meeting where the twenty questions posed in this commentary are reviewed and answered. Such a meeting, properly moderated, shouldn’t last longer than three hours. Business owners may find those few hours to very important, productive, and game changing – and greatly appreciate the advisor who arranges it.
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50 Hurdles: Business Transition Simplified
If you are an owner of a family business you might consider purchasing a copy for every member of your business family. If you are an advisor to business owners you might consider purchasing a copy for one or more of your clients. Discounts are available for multiple book purchases.
Ian R. Campbell FCPA FCBV
Ian R. Campbell is a Canadian business valuation and transition expert. He is the author of several Business Valuation texts and of 50 Hurdles: Business Transition Simplified. The Canadian Institute of Chartered Business Valuators recognizes his contribution to the Canadian Business Valuation Profession through the annual The Ian R. Campbell Research Initiative.
He writes The Business Transition and Valuation Review newsletter for business owners and their advisors.
You can reach him by email at firstname.lastname@example.org, or by telephone at 905 274 0610.