Corporate Finance in Atlantic Canada

Commentary on corporate finance issues for small- & mid-market private companies in Atlantic Canada

Archive for October 2013

10 Ways to Determine if You’re Ready to Transition Your Business

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Interesting article on preparing your business for sale (although written in the US, and while Canada & US are alike in some ways, in many others we’re not alike, and the transition of mid-market businesses has some significant differences).

  1. “Have spent some time and money getting educated on the process of how to transition your business. You have discussed transitioning with your loved ones.
  2. Your personal, financial, and business goals are aligned, meaning they are defined, co-dependent, and linked.
  3. You have created an advisory team that includes, at minimum, the following:  an attorney, CPA, wealth or financial advisor, exit advisor, spouse or partner or other family member who is a “significant other” in your life. Other advisors may include personal friends and advisors, banking advisor, M&A attorney, estate planning attorney, real estate attorney, business attorney, ESOP specialist, tax specialist, insurance specialist, foundation / charity, key employees, investment banker or business broker, board members, family or personal counselor.
  4. You have created a contingency plan that should include buy-sell instructions, appropriate insurance, and specifies what should happen if before you transition something was to occur outside of your control that would prevent you from operating your business or unwillingly force you to transition. You have reviewed this plan with your trusted advisors including family members and/or partners if applicable.
  5. You have a completed a strategic analysis, business valuation, and personal, financial, and business assessment(s) within the last year.
  6. You have considered all of your exit options and optimum deal structure and weighed the pros and cons of each in relation to your stated goals and objectives.
  7. Your transition plan is written and includes goals and objectives, clearly defined tasks and accountabilities, definition of your transition team, definition of your transition process, a plan leader or project manager, timelines, a budget, and your role before and after transition. This plan ideally has a multi-year implementation timeline.
  8. You have considered and designed a post-business life-after plan. This plan is linked or part of your wealth-management plan that has been prepared by a professional financial advisor and, if applicable, estate-planning attorney, insurance specialist, tax specialist, and charitable-foundation specialist.
  9. You have a pre-transition value enhancement / preliminary due diligence project under way to de-risk the business, maximize its value, minimize taxes upon transition, and improve the probability of a smooth transition to the next owner including family, partners, or employees, if applicable. Family transitions should be treated no differently than other transition options. This plan ideally has a multi-year implementation timeline.
  10. You have a management program under way to ensure that the post-transition leadership is prepared to operate the company after you exit, and have secured the appropriate specialists to handle your desired transition option.”

Obviously, many companies haven’t taken all 10 steps.  The list is designed to highlight for business owners that these are the kinds of preparation steps that should be taken to maximize your transition, whether that is to transfer/sell to family, employees or an outright sale.

Written by Dan Jennings

October 30, 2013 at 9:48 am

Fireside restaurant deal

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Congrats to Tom Wile & Lynne Ferguson on acquiring the Fireside restaurant (off Spring Garden Road, formerly Thackerays for us ‘over 40’ crowd).

The retail food & beverage sector can be a very tough business, but some operators are very successful at it, including a number of multi-location operators around Halifax.

Written by Dan Jennings

October 10, 2013 at 10:15 am

Posted in Announced Transactions

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