Filling the void
Transferring your business will free up considerable time in your schedule and can change your social status and even your family dynamics. After spending years focusing mainly on your work, it’s time to communicate your personal intentions and confirm the aspirations of others around you to make sure everything goes smoothly.
In many cases, responsibilities end up being transferred more quickly than expected.
“In nearly 50% of business transfers, the transition from seller to buyer moves faster than expected. This change can be destabilizing; that’s why it’s important to prepare yourself.” - François Archambault, Senior Manager – Private Banking 1859
Business owners who start thinking about their post-transfer future early are in a great position. You’ll be better equipped to seize an unexpected opportunity to transfer your business under favourable conditions if you already have a plan for the next steps.
Good planning to help you adapt
“A typical business transfer requires three to five years of preparation followed by six to nine months of negotiations and a one- or two-year transition period,” Pierre-Bertrand estimates. “It’s a fairly long and complex process.” Let’s take a look at two concrete examples that illustrate what can happen during this period.
What do these stories have in common? In both cases, the business owner started the succession process early and was able to use the right tools to manage the ups and downs of the business transfer and of life in general.
Change in successor
Suzanne* spent around a decade preparing to transfer her manufacturing SME within her family. Thanks to good advice from external resources, two of her three children decided to become shareholders. The third preferred not to be involved at all. When it comes to the day-to-day management of the company, her daughter and her son-in-law took responsibility for finances and general management, respectively.
Once the transfer was completed, Suzanne was able to focus on her passion for skiing. She also became a mentor to other manufacturing companies, guiding them in the creation of an engineering department.
A new challenge
Samir* served as the leader of a group of companies in complementary industry sectors. Over a period of nine years, he defined, prepared and delegated certain key duties so he could focus more fully on innovation and on the organization’s strategic development. He communicated a clear vision for a lasting organization, with roots in Quebec and ambitious growth objectives.
Upon his departure, his successors were ready to take the reins. Samir now sits on the board of directors of the business collective and chairs an influential group in the business community.
*Pseudonyms.
“Sometimes, everything goes as planned. Other times, you face surprises—both pleasant and unpleasant. Put time on your side by starting to think about transferring your business as early as possible. You’ll be in a better position to react to the unexpected.” - Pierre Bertrand, Senior Manager – Business Transfer at National Bank
5 tips for “post-business” planning
1. Take some time to visualize your plan
The three to five years of preparation for a business transfer will be added on top of your usual duties. Before you even begin the transfer process, you should take a moment to reflect on your role. “What are your needs and your personal financial goals? Are you comfortable financing a portion of the transaction? Do you want to remain involved in the business?” François Archambault clarifies.
In addition to carrying out your role in the business, you should set aside time to think about your future, passions and interests: travel, leisure, coaching or mentorship, philanthropy or angel investing, among other options.
2. Make the most of it
This moment of introspection should not be seen as another chore in the already complex business transfer process. This is a well-deserved reward after years of hard work. “What do you want your life to look like after you transfer your business? What matters most to you? It’s amazing to find yourself with so much freedom,” says François Archambault.
3. Get inspired by others
Consult with your professional networks and expert teams and be on the lookout for opportunities to connect with others who have transferred their businesses so you can get inspired by their experiences. How do they spend their time now? How do they feel about their former business? Have they been able to let go?
4. Communicate clearly
By sharing your thoughts with your loved ones and getting their feedback, you can clarify what your life could be like after the business transfer. “For example, the wife of one business owner was very clear that she didn’t want him to spend all day hanging around the house; she knew him well enough to know he would need projects to keep him busy!” says Pierre Bertrand.
This is all the more important if the business is being transferred to a family member, as it will help maintain positive relationships outside the office. “It’s a great idea to hold family meetings to give everyone involved a chance to express their interests and aspirations,” adds François Archambault. “One person might show an interest in operations management, another in philanthropy, etc.”
This process is often carried out with expert support and continues over several years, even after the transfer is completed.
5. Get personalized support
Specialists can help you with business valuation, taxation, creating trusts and financial planning. There are also resources available to streamline the human aspects of business transfer. “Ask your financial partner to put you in touch with the right people so you can take advantage of these services,” suggests Pierre Bertrand.
Prepare today, enjoy tomorrow
No plan is final; you’ll need to adapt your plan based on the opportunities and challenges that arise. “Start the process as soon as possible so you can make changes along the way. Your efforts are sure to pay off, allowing you to make the most of your future,” concludes François Archambault.