The Business Transition Blog

11 Ways to Prepare for Transition

The Common Denominator of Successful Transitions

As I reflected upon the successful business transitions with which I’m familiar, I looked for patterns and commonalities that made the business owner successful in achieving their goals. There are so many variables and unique situations, it’s hard to pin it down to one or two things, but here are eleven points that will increase your chances of success.

  1. They had a goal. It wasn’t a good intention or a wish, but an actual goal with a plan, a date and a strategy.
  2. They had help. They didn’t do it on their own. They reached out to experts they could trust to give them good advice. They had coaches who, like pilots, could help them to navigate the unknown waters, develop their plans, make adjustments along the way and follow through to their destination.
  3. They prepared well in advance. It wasn’t spur of the moment or a rush.
  4. They got the timing right. They put themselves in the right place at the right time by being prepared when the buyer showed up.
  5. They did their due diligence on their own business. They looked at their business through the eyes of a buyer and corrected the critical pieces that could hold up the sale or cost them dearly.
  6. They had a good story to tell to help sell the future value of the business. They had growth, profitability, a definable market, cash flow, predictable revenue, and a product or service that was in high demand.
  7. They had a diverse customer base with no one or two customers who represented a large percentage of their revenue.
  8. They had their books in order. Taxes and payables were up to date. Receivables were under control. They knew their numbers.
  9. They made themselves redundant. The business was no longer dependent upon the owner to be there all the time. The owner had successfully delegated responsibility and trained competent employees to do whatever was necessary to keep the business operating well.
  10. They were personally ready to move on. They had prepared themselves mentally and emotionally for the change.
  11. They were lucky.

That last point is important. The statistics aren’t in your favour. Only a small percentage (less than 20%) of businesses will ever find a buyer and successfully sell. Even those who have done all the previous ten points have no guarantees, but their chances go up significantly if they do. If you’re counting on JUST being lucky and not doing all the other steps necessary for success, you might do just as well by buying a lottery ticket. But I wouldn’t bet my retirement and the livelihoods of my employees on it.