Selling or changing the ownership of your business is one of the most significant decisions you can make as a CEO. That’s why it’s critical you plan now and assemble a business advisory team to ensure maximum growth and smooth succession. Your team should comprise a business advisor, financial advisor, and other specialists who work with professionals in your organization to align your corporate and financial objectives, whether that’s business monetization or better business value.
The right business advisory team can make all the difference between success and missed opportunity.
Why Do Business Transitions Almost Always Fail?
Selling or changing the ownership of a company provides CEOs with multiple challenges. Research shows 70 percent of all businesses don’t transition successfully, according to Fraser Law Firm. There are numerous reasons these projects fail. Sixty percent of organizations experience problems with communication and trust during the transition process, while 25 percent fail because of a lack of preparation. Other issues — poor tax or financial planning, for example — can also increase the chances of failure.
Using the services of a business advisory team can solve these problems. However, few organizations establish one of these teams successfully. Others don’t use an advisory team at all and, as a result, experience multiple transitional problems. Only 14 percent of CEOs have assembled a formal transition advisory team, according to research from Forecast Strategic Advisors.
What Does a Business Advisory Team Look Like?
The size and scope of your advisory team (or “advisory board”) depend on the requirements of your business. However, using the services of the professionals below could increase the chances of a successful transition:
- Business advisor: Responsible for executing strategies that improve the operational and financial management of your business during its transition. A business advisor oversees the entire transition project and performs budget planning, risk analysis, and other tasks.
- Financial advisor: Someone who creates custom financial strategies that help you achieve your financial goals during and after the transition phase. A financial advisor provides specialist savings, budgeting, investment, insurance, taxation, and financial planning advice tailored to your business.
- Certified Public Accountant (CPA): Helps with a broad range of financial issues during your transition. These issues include taxation, wealth management, and the execution of financial-related tasks such as auditing and financial reporting.
- Corporate attorney: A specialist who helps you navigate the complexities of corporate law during your transition. A corporate attorney might appraise your business for prospective buyers, negotiate contracts and agreements with clients, and ensure you meet all legal obligations and responsibilities.
- Estate attorney: Someone who specializes in commercial property law. An estate attorney proves invaluable if selling or transitioning your business.
- Business valuation specialist: Determines the financial value of your business and provides you with a detailed report about your financial assets that you can present to prospective buyers, investors, partners, and other professionals.
- Executive coach: Helps you realize your organizational goals during the transition process by developing your potential and providing you with the support you need at this often stressful time.
An advisory board made up of the above professionals provides you with fresh perspectives when selling or transitioning your business, helping you evaluate creative new ideas and strategies for growth and success.
Each specialist brings something different to the table. Assembling such a team improves accountability because each expert handles a unique set of tasks.
Why Should You Assemble a Business Advisory Team for Transition?
You could enlist the above professionals independently or establish a team of experts that work alongside each other. The ‘team’ approach is almost always the best one for CEOs planning to transition. Here’s why:
- Success doesn’t exist in silos. Professionals who operate independently can’t communicate with each other and may perform tasks that overlap, resulting in multiple issues during the transition phase.
- Teams that work together can foster a culture of creativity and idea generation, which leads to more successful transition outcomes.
- Teamwork improves collaboration and reduces conflict.
- Interconnected teams improve productivity by 20-25%, according to a report by Great Results Team Building.
Why Should You Act Now?
Selling or transitioning a business can take months, and many factors will influence the process. These factors include interest rates, demographic trends, and the general economy. Assembling a business advisory team now prepares you for every eventuality. You can increase the chances of a successful transition that delivers better business value and monetization.
Creating a plan for business transition now helps you:
- Achieve your long-term strategic goals
- Value your business
- Find the right group of professionals that align your personal and business goals
Final Thoughts
Companies of all sizes often struggle to transition because they don’t plan accordingly. That’s why it’s critical to assemble a team of professionals like The Association for Enterprise Growth (AEG) who provide ongoing support for better organizational and monetization outcomes. Incorporating AEG experts like a business advisor, financial advisor, and executive coach into your team eliminates many of the problems companies face during the transition process.
Image Credits: Photo by ThisisEngineering RAEng on Unsplash
