The Next Transition Blog

Personal Transition Planning: New Opportunities for You and Business Owners

Posted by Paul Cronin on Wed, Dec 02, 2015



by Jack Beauregard, author, founder and CEO of Successful Transition Planning Institute

An estimated seven million baby-boomer business owners will exit their companies over the next 20 years — and many of them are your clients. How can you, as a CPA, take advantage of this growing wave so that, instead of losing your clients, you can actually develop new business opportunities from these transitions? In addition, when you are ready to exit from your own CPA practice, how can you transition most successfully for both your maximum financial outcome, as well as your personal satisfaction?

The process of personal transition planning can successfully answer the questions above.

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Topics: exit planning

Are Accountants Leaving Millions on the Business Transition Table?

Posted by Paul Cronin on Wed, Nov 18, 2015


In a recent chat with our Australian affiliate, Transition Planning Australia (TPA), we learned that the accounting industry is waking up to the huge potential in new revenues from Baby Boomer's business transitions. 

TPA learned from a local accounting firm that there are many revenue streams for firms to draw from a business transition.  No doubt, some accountants may balk at encouraging Boomers to transition their firms and "losing" a client.  However, that is simply ignoring the obvious:  all business owners leave their business some day, every single one.  Since this large transition will be happening anyway, accounting firms who act strategically, can position themselves to maximize revenues on these transitions, and seek to remain in place with the new generation or ownership.

Here is an example of one accounting firm's analysis for you to ponder (see spreadsheet below):

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Topics: exit planning

Finding Your New Owner – Look Inside for Business Succession

Posted by Paul Cronin on Wed, Apr 23, 2014

By Beth Davis, principal of Learnings for Leaders, and an STPI-certified Transition Planning Consultant

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Topics: Baby Boomers, business succession, sell my business, whats next self asessment

Pass the turkey (where's my bleeping check) | Business Succession

Posted by Paul Cronin on Tue, Nov 26, 2013

My annual homage to Thanksgiving and the foibles of business succession in families, first published in 2011.

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Topics: selling a business, business succession, exit planning

Where will you be five years from today? | Baby Boomers

Posted by Paul Cronin on Wed, Nov 13, 2013

This edition of our blog is by guest blogger, Beth Davis, principal of Learnings for Leaders.

"Where will you be five years from today?"

That’s the question asked by Compendium in their little inspirational book Five. It reminds me of the ubiquitous answer to the transition question in the CEO peer groups I ran for nearly fifteen years. Regardless of age, years in business, or any other pertinent demographic if a CEO was asked when he or she might want to sell their business, the answer was almost always, “in five years”.

What do you make of that?  In my speculation, it means that the question is relevant and close but the answer far enough away that the owner doesn’t have to do anything about it just now – a decision that can be delayed. The problem is that the five-year window keeps slipping and the planning doesn’t happen.

Deciding what’s next – start with what you value

A good place to start is with your values. What’s important to you? Be honest with yourself – it’s too easy to create the “God, family, country” list. Where do you spend your time and your money? That’s a good indicator of what’s important to you. When I looked at it that way, I saw that I spend a lot of time and money on training, books, exercise and home goods – so some of the things that are important to me are education, life-long learning, health & fitness and good design (I won’t get into “the hair expense” – something most women of a certain age know a lot about).

What did you discover? Did that exercise make you wince? If so, you might want to start down a path of self-examination and redefinition. In re-examining your values, start with the traits or qualities that describe the people you admire, the places you love, the programs you support – from this list you can choose your top five lifetime values. Write them down and keep them near so you can frequently reflect on them. How are you living those values? On a scale of 1 to 5, how consistently do you live what you value? What would you like to change? How would you like to be different in this? Identifying your top five values and answering these questions is a short-cut to naming the top goals for your “what’s next”.

Create a personal mission statement

I love this quote, “Your life is worth a noble motive”.  Most leaders I know are good at making things happen, not just letting things happen. And yet, in this arena of business transition, I often see “the deer in the headlights” look.

Once you’ve clarified your values, consider creating a mission statement for your life. Just as your business has a mission or purpose, so can your life. When you dedicate your life to something greater than yourself life is a bigger adventure, something you can organize around. Ask yourself, what services or activities do my values call me toward? What is my legacy? What is the contribution I want to make? Can you start to sense a direction here?

Satisfaction and the wheel of life

Once you’ve defined what’s important to you and gotten clear on what your life is all about, you can take a look at each spoke on the Wheel of Life and measure your level of satisfaction in each domain.  Many business owners speak to me about the lack of balance in their lives. Here’s the place where you can gauge what you’re attending to (or not) and what your goals and options are in each “spoke”.

When I coach owners through the Successful Transition Planning Institute’s LIVE™ program, I help you decide how you want to live your life going forward.

We look at ten “spokes” –

  1. Creativity

  2. Family

  3. Income Producing Work

  4. Intellectual Stimulation

  5. Partner/Spouse

  6. Physical Health

  7. Recreation

  8. Spirituality

  9. Social Connections

10. Volunteer Work

We look at six options for each spoke of the wheel and then further, within each option we look at both the upside and downside, so that both your thinking and your life is balanced. From this investigation, you can create a life plan.

Define your own success

In the end, you need to define success in your own terms. I think Viktor Frankl said it best, “success is the side-effect of your personal dedication to a course greater than yourself”. Enough said.


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Topics: Baby Boomers, exit planning, transition planning

90% of business owners will fail in selling a business

Posted by Paul Cronin on Tue, Jul 23, 2013

About 24,000 businesses sell each year in the US according to B2BCFO in their new book, “The Exit Strategy Handbook”.

About 378,000 businesses owners turn age 65 each year (this trend will continue for the next 15 years).  These are the Baby Boomers.

Many of these owners will be considering retirement and/or a sale.  (Only 40% of businesses transfer to family members).

This is the oft-mentioned "tsunami" of business owners seeking a way out.

If 40% of these owners transfer their business internally, 225,000 will be seeking a way out.

The odds of these owners for a successful sale of their business is about 10% (ten percent).

In other words, 90% of these business owners seeking a way out WILL FAIL to sell their businesses.  Most will simply wind down and close.

Lesson:  Business owners need to prepare themselves and their businesses for this tsunami, or face personal and financial ruin.

For those who recognize that they cannot sell or transfer their business, they still need a plan for their lives.  For many such owners, their business is their connection to friends, vendors, customers and employees.  If they lose the business, they lose their connection to life.  Yet hanging onto the business has its own risks.  Ths biggest?  That the owner will not pursue long-sought dreams - in other words they will fail to understand and experience their life's true purpose.  Time has become their enemy.

If you are a long-time business owner, or know one, you might gain some insight by taking a 20 minute questionaire:  The What's Next? Self Assessment.  It will give you hope that you can beat the odds by conducting good transition planning - if you take the time.  Click below to learn more.

What's Next? Self Assessment™
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Topics: selling a business, Baby Boomers, exit planning, what's next self asessment

Getting Your House in Order | Selling a Business

Posted by Paul Cronin on Wed, Apr 17, 2013

Today's guest post is by Deborah Millin, founder of Upper Level Solutions in Massachusetts.

Getting Your House in Order - Preparing the operations of your business to maximize your profit in a sale.

Regardless of what ‘operations’ means in your company, there are things you can do to get your operational house in order before you bring in a formal transaction team that will maximize the value of your company and get you the highest possible price in a sale.

There are some operational documents that every M&A professional will require.  If you have most of that completed when they walk in your door, it will save you money and time during the critical due diligence phase, and it puts forth a great first impression as a company that is organized and efficient.  There are also issues that arise during due diligence that require immediate attention and can be quite time consuming – the more you can do in advance, the more time your team will have to address those urgent items as they arise.

As a general rule, you should leave yourself 6 months to review your major processes and either update existing documentation or create documentation where none exists.  Regardless of your company’s size, you can create simple and straightforward documentation for each of these items – never create 10 pages when 1 page will do the job.

HR documentation - Would an outside person be able to look at your organizational chart and clearly understand the reporting structure and see where every employee fits in the company?  If not, it’s time to update. Perhaps you’ve been thinking about some changes in the structure that would be more efficient or put more focus in a growing area – make those changes now, and create an organizational chart that is concise and understandable.  

Many smaller companies don’t have a formal job description for all positions or have annual reviews documented for each employee.  These become critical in a sale process for the buyer to understand the roles and the skills of your employees.  Make sure you have updated documentation on any bonus and merit increase structures, stock option or equity agreements, and change in control or other incentive agreements.  This is also the time to update or create a basic employee handbook and benefit summary page so the buyer can understand not only the facts on what benefits are offered, but also get a glimpse into your culture and values.

Clients and Vendors - A buyer will want to see basic information about your clients and vendors.  If you don’t already have this information at your fingertips, use this time to compile the information. Contact information, annual amount of revenue (client) or spend (vendor), your internal account manager, current projects and current issues/hot buttons should be easily available for review during this process.

If you have a system that can generate these types of reports on an ad-hoc basis, then you can easily run a report to get the latest information as it is needed throughout the process. It is critical that you insure your employees are keeping this information up to date in your system. If you do not have a system, however, you should compile the information in a simple spreadsheet report – and again be sure it is kept up to date at least monthly.

Operational Processes - The added benefit of this exercise is that by looking across your organization, you will inevitably find efficiencies that can be implemented for immediate benefit to your team and your bottom line.  Look at how you sell to clients and onboard them once they sign a contract, how you invoice and how you manage client accounts on an ongoing basis.  Review your procedures for troubleshooting, escalations and internal approval levels – how you manage projects for client initiatives and for internal software and hardware upgrades.  

Are all of these things documented?  Do they make sense both on their own and as part of a natural flow from one process to the next?  Having your processes documented allows for more consistency, easier training for new employees, and serves as a base for your team to continually develop and improve as they incorporate lessons learned.

Operational Metrics - What key performance indicators (KPIs) are you looking at as a management team to measure the success of your business?  Revenue and expenses are basic, but what are your operational goals and how are you making sure you meet them?  If you look at certain metrics every week/month/quarter, compile them in a consolidated report.  Make the metrics and trends easy to digest with graphs or a dashboard (green/yellow/red) approach.  This makes it easy for your management team, and ultimately your buyer, to see where things stand – and shows your buyer and transaction team that you have a solid understanding of your business.

Legal Clean Up - This is also the time to do an assessment of your contracts with clients, vendors and contractors.  Be sure all agreements are up to date, and if any have lapsed get them cleaned up.  In addition, review any intellectual property (IP) within the company, update filings for patents, trademarks, etc. to be sure you are protecting your interests and avoiding any liabilities that could cause issues during due diligence.

It is good practice to have all of these items up to date as a normal course of business, but it is increasingly critical as you prepare for a sale.  Keep in mind that your team still has to do their ‘day job’ so when building schedules to update your documentation, be cautious not to overburden your team.  Bringing in an outside consultant can not only take some of the effort off your full-time staff, but can also give you a fresh perspective and apply best practices from other companies and industries that could greatly benefit your operations.  

By planning these efforts out, you will put your company and your employees in the best position possible by increasing the overall value of your company and ultimately maximizing your price when selling a business.

About the Author:  With 20 years of operational, project management, and client relationship experience in a variety of industries, Deborah Millin founded UpperLevel Solutions to provide a cost-effective alternative for growing companies in need of COO-level support.  (learn more).

If you are a long-time business owner, or know one, you might gain some insight by taking a 20 minute questionaire:  The What's Next? Self Assessment.  It will give you hope that you can conduct good transition planning - if you take the time.  Click below to learn more.


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Topics: selling a business, succession planning, whats next self asessment

The Top 10 Mistakes To Avoid When Selling A Business

Posted by Paul Cronin on Mon, Mar 18, 2013

I read an insightful article by Dennis White, partner - Verrill Dana, LLP "The Top 10 Mistakes To Avoid When Selling A Family Firm"

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Topics: selling a business, family business, transition planning, whats next self asessment

11 Things You Absolutely Need To Know About Selling Your Business

Posted by Paul Cronin on Mon, Feb 25, 2013

11 Things You Absolutely Need To Know About Selling Your Business, by John F. Dini, CMBA, CBI- a book review by Paul Cronin

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Topics: selling a business, whats next self asessment, finding your new owner

Are you too old to leave your business? | Succession Planning

Posted by Paul Cronin on Tue, Jan 29, 2013

I posted something on a Linkedin group recently, and one person commented that she had been trying to get her 80 year old mother to retire from the business "for years", but that she gave up.  Her mother went to work each day and was happy.  Part of me loves that story and part of me hates it.  It's a bit like saying, " I'm too old to change, I'll just do the same things day after day".  Who wants that?

I get that people want to feel useful and needed; it's human nature.  But dying at your desk is really not being truthful.  The reality is that we don't die at our desks; instead we die in a hospital, or a nursing home, or a hospice, or even an ambulance.  We are brought into this world by the medical-industrial complex and we will leave the same way.

So what do you say to someone who feels that dying at their desk is a real option?  I suggest asking them this: "is dying at your desk the BEST you can do with the REST of your life?"  It's a tough one, but also the truth.  For me, I want to work as part of the many activities that give my life a sense of purpose.  I expect paid work, volunteer work, faith, family, education and fun to be equal parts of my life in my 60s, 70s and beyond.

Every business owner must face this truth:  you WILL leave your business someday; you have two choices:  you can plan for it on your terms, or let someone else plan it for you.  Which choice give you more peace of mind?

If you are a son or daughter of a business owner (and not working there), how can you be sure that your parent's business will not destroy the family assets when he/she dies or becomes disabled?  It's tough enough to bury your dad (I have already), but to be consumed with closing down the business, while telling cutomers, employees and vendors that "mom isn't here anymore, so sorry you won't get you order, or your paycheck, or get paid for that invoice",  would be even more stressful.  Is that the legacy your dad dreams of today, turning the tragedy of his death, into your living nightmare?  I doubt it.

If you are a business owner, maybe you can stop now and ask yourself, "What happens to my business tomorrow, if I die today?"  Walk through each stakeholder of your business:  vendors, landlord, employees, accounts receivable, inventory, CPA, lawyer, etc., etc. and ask yourself, "what do I owe them?", or "what do they need from me to wrap up my affairs?".

If you are selling a business, these are good questions for you as well.  Hopefully, you will have many years to enjoy after you sell.  If you get some help from a business consultant who has helped others plan for the transfer or wind-down of a few businesses, you will save yourself a lot of time and aggravation.

Of course, maybe what your mom is fearing is a boring, meaningless retirement.  In the old days, that was to be expected for retirement, but not today.  We have so many options for activities and there is such a need to share wisdom wtih young people (in school and in business).  Surely a successful business owner can migrate to a role of mentoring others in the many challenges of life.

So what do you think a son or daughter can say to their parent who refuses to discuss leaving the business?


If you are a business owner, we have a What's Next? Self Assessment that can help you answer some important questions about your business, and your life.  To learn more, click this button:

What's Next? Self Assessment™

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Topics: selling a business, succession planning, estate planning