Establishing a culture of accountability will strengthen the succession planning process too. “Conduct monthly accountability meetings after certain tasks have been assigned so the management team is expected to execute what they need to do by a certain date,” says Vella.

Valuation and preparing for a sale

Some business leaders will be exiting their position due to a sale. Preparing for a valuation can help optimize the sale value of your business. You want to make sure it has good growth prospects, a record of profitability and a reliable balance sheet. You may need to clean up the business, remove personal expenses from the books and work with an accountant on how to structure the sale to minimize your tax liability.

“You don’t want buyers to get into the business they just acquired and see that it’s crumbling, that divisions are short-staffed and they have to go hire to get back to normal operations,” says Vella.

“Buyers can see through slash and burn-type expense cuts to attempt to increase the valuation. Showing longer-term proof the company can function just fine with the operational efficiencies is more likely to translate to improved valuations.”

Valuing businesses is a specialized skill, so you may benefit by hiring a chartered business valuator. Vella recommends a certified exit planning advisor or transition consultant that can help owners prepare their company and find the right advisors to support their existing advisory team.

Being clear about post-succession plans

If an exit is the beginning of a business owner’s retirement, they’ll experience a sudden shift in their daily routine once it happens. They won’t be managing the many facets of running a business, as overwhelming and engaging as that can be. Transition planning means acknowledging and planning for what will occupy your time when you’re free to take on other pursuits.

Vella remarks on how owners can go from working up to 80 hours a week to relaxing poolside, which can be jarring for some former executives. “At first you might experience nostalgia, and then really enjoy that you don’t go into work every day but that can get old quickly,” she says. “Going from 80 to zero hours of work isn’t easy.”

She suggests exploring life after business planning, which focuses on how you can leverage your expertise or connection to a certain community and offer those around you insights they might treasure from someone with your experience.

“Maybe you can try putting more energy into charities or helping advise other businesses, in order to find purpose and meaning in your retirement life,” Vella adds.

The Exit Planning Institute suggests to owners, “You manage value throughout the course of your business lifecycle, but the most important time to manage your value is after exiting your business. To achieve the most value, you have to manage not only your business value but your personal financial value as well.”

The key takeaways Vella wants to stress to all business owners embarking on transitioning away from their company are to set clear goals, start as early as possible and don’t venture into this process alone. The more you can prepare before the departure day arrives, the better you’ll be set up for a smooth exit. Plus your business will be set up to thrive thanks to your foresight and hard work.

Learn more about selling your business successfully with ATB’s Business Transition Guide. Want tailored advice for business transition planning? Reach out to our Business Transition team at atbwealthtransfer@atb.com.