Does Your Company Have a Business Transition Plan in Place?

 Posted on March 17,2023 in Business Law

At some point, just about every business arrives at a point where a transition is about to take place, but this is often something many business owners do not think about until the moment has arrived. A business transition may come about for a variety of reasons. The owner has decided that it is time to start thinking about retirement or maybe they want to be ready in case the right offer to purchase comes along. Some business owners realize that if something happened to them, no one else is currently available to take over and keep the business running smoothly. Whatever the reason for a business transition, it is important that a business owner takes the steps to make sure that everything is in order for a smooth and successful process.

Organize the Company’s Financial Statements

Regardless of the reason for the transition, whoever will be running the company will need to know the financial position the company is in. If you only have company-prepared statements, consider obtaining reviewed or audited documentation, especially if you are looking to sell the company. Buyers will not accept company-reviewed financials as proof of the company’s financial health.

It is also important to gather any permit and/or licensing documentation that your company has.

How Is Your Management Team Performing?

If a business transition becomes necessary because something happens to you physically, is your current management team capable of successfully taking over the duties that you currently handle? This is also an important consideration for any potential buyers if you are considering selling your business.

Review All Contracts and Agreements the Company Has

The majority of businesses have different contracts or agreements in place that stipulate their relationships with customers, suppliers, and even banks and other financial institutions. Make sure that a contract has no potential impact on any proposed business transition. If there are some issues, the contract may need to be renegotiated.

Customer List

As you draft up your transition plan, it is also important to have a current customer list. Any potential buyer will want to know how many customers a business has and if those customers will continue to do business with a new owner.

Work with a Broward County Business Lawyer

Another step in a successful business transition plan is working with an experienced Fort Lauderdale, FL business attorney who will make sure that your best interests are always protected. Call The Elliot Legal Group, P.A. at 754-332-2101 to schedule a confidential consultation.

Source:

https://www.wellsfargo.com/the-private-bank/insights/wpu-8-best-practices-business-transition/