Taking your business to the next level by using a business transition plan is exciting but can be stressful. There are a lot of different parts that you need to consider! If you would like guidance and help with your business transition plan, Cooper Norman has financial planning services to help you and your business.
What is a Business Transition Plan?
A business transition plan can look like a variety of different ways. It is all dependent upon what your end goal is as a business owner. This transition plan is typically a document that provides detailed information on the processes in order to have a successful transition. Having as many details as possible will be helpful for those who read over the document.
Why is a Business Transition Plan Important?
Having a business transition plan will help protect your business when it’s about to be sold or there is a change in partnership agreement or ownership. It is said that it is one of the most important transactions in a business owner’s life. Sometimes it is even more profitable for an owner to sell their business or partnership.
Have a Title
Let’s break it down simply about how to lay out your transition plan. First, add a title! Having a title helps to show the purpose of the business transition plan and summarize it in a few words.
Details are Key
Provide details about the transition. This will include approximate dates of when things will happen. If you are giving your business to a new owner, include who that will be as well as the start date. Include as many details as you can so your transition plan is clear to the reader.
Establish Expectations
Establish expectations for all individuals involved in the business transition plan. When you lay things out clearly, there is little room for error and everyone is on the same page.
Transfer Requirements
Essential knowledge transfer requirements—all skills that are needed including tacit knowledge including wisdom learned and intuition learned from the job as well as explicit knowledge that is tangible like documents or other data.
Create a Checklist
Checklists are very helpful to make sure no steps are missed. It can also act as a guide for key components to ensure that no deadlines are missed. This can be an asset as you work towards making changes to your business.
Transition Checklist
Transition Checklist offers a guideline for key transition activities that must be completed by certain dates to facilitate the transition.
Transition Plan Agreement
To make the agreement official, it’s important to have signatures from all parties. This will also vary depending on the type of business transition plan you are creating.
Remember that this is not a comprehensive list of everything you need for a business transition plan but a good place to get started. Creating a business transition plan can have its challenges and it is comforting to know that you can rely on Cooper Norman to help you with your financial planning needs.