An Ad­vi­sory Team Will Stream­line Your Suc­cess­ful Busi­ness Sale

Plan your strat­egy—with due dili­gence—sooner rather than later

BC Business Magazine - - Facet Advisors -

Dar­ren Mil­lard, owner of Facet Ad­vi­sors, points out that en­trepreneurs tend to make two mis­takes when sell­ing their busi­ness. “First, they of­ten over­es­ti­mate the value of their busi­ness,” he says. “They also, if they are a small com­pany, as­sume that sell­ing will be sim­ple.”

But at a time when even the small­est of com­pa­nies has a pres­ence in—or trans­acts with— other coun­tries, sell­ing to the best of the owner’s ad­van­tage re­quires enor­mous prepa­ra­tion, and it is only by scrupu­lously plan­ning the exit that he or she will max­i­mize the com­pany’s value.

Mil­lard says, “More and more, Cana­dian busi­nesses have a U.S. com­po­nent or con­duct over­seas trans­ac­tions, and we struc­ture sales to take into ac­count due dili­gence in mul­ti­ple ju­ris­dic­tions. This is pos­si­ble thanks to our team of ad­vi­sors hav­ing di­rect ac­cess to a global af­fil­i­a­tion of pro­fes­sion­als.”

In fact, Facet re­cently be­came a mem­ber of HLB In­ter­na­tional, one of the lead­ing global ac­coun­tancy net­works with a pres­ence in 150 coun­tries. “HLB is one of the top 12 ac­count­ing net­works in the world, and our mem­ber­ship ex­pands our abil­ity to sup­port our clients’ in­ter­na­tional needs,” says Mil­lard.

Given that the busi­ness sec­tor in gen­eral de­mands more skill than ever due to the abil­ity to op­er­ate in mul­ti­ple ju­ris­dic­tions, it would fol­low that own­ers also would have a clear idea of what they want for them­selves when it comes time to bow out. “But, understandably, they have spent ev­ery minute of their ca­reers striv­ing for suc­cess and of­ten don’t even know if they want to un­der­take an as­set sale or a share sale,” says Mil­lard. “Some of them don’t ap­pre­ci­ate that you need a core team to carry through the sale, con­sist­ing of a lawyer, a wealth ad­vi­sor, and an exit plan­ning ad­vi­sor—as well as coun­ter­parts in the dif­fer­ent coun­tries in which you have a pres­ence.”

To help clients pre­pare to sell, Facet has de­vel­oped a check­list of 10 el­e­ments. They in­clude:

• Dis­cussing tran­si­tion­ing with

loved ones.

• Com­plet­ing a strate­gic anal­y­sis,

busi­ness val­u­a­tion and per­sonal, fi­nan­cial and busi­ness as­sess­ment(s) within the last year. • Con­sid­er­ing all of your exit op­tions and op­ti­mum deal struc­ture, and weigh­ing the pros and cons of each in re­la­tion to your stated goals and ob­jec­tives.

• De­sign­ing a post-busi­ness,

life-af­ter plan that is linked to—or is part of—your wealth man­age­ment plan, which has been pre­pared by a pro­fes­sional fi­nan­cial ad­vi­sor and, if ap­pli­ca­ble, es­tate plan­ning, in­surance, tax and char­i­ta­ble foun­da­tion spe­cial­ists.

• Un­der­tak­ing a pre-tran­si­tion

value en­hance­ment/pre­lim­i­nary due dili­gence project to de-risk the busi­ness, max­i­mize its value, min­i­mize taxes upon tran­si­tion, and im­prove the prob­a­bil­ity of a smooth tran­si­tion to the next owner.

Above all, Mil­lard be­lieves busi­ness own­ers should start think­ing about exit strate­gies sooner rather than later. “You should be­gin at least three to five years be­fore the ac­tual process for a va­ri­ety of reasons, not the least of which is psy­cho­log­i­cal,” he says.

“So much of your iden­tity is tied up in your com­pany that it will take time to imag­ine your life be­yond that.

“The best ad­vice I can give is to visit our web­site and re­view our check­list of 10 el­e­ments—and then call the pro­fes­sion­als. It will en­sure that a very com­pli­cated process gets started in the proper fash­ion.”

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