Our Business Is Growing Yours

Queen City Consulting LLC
Burlington, Vermont

Transition Advisory Services

Transition Advisory Services

A vast majority of today’s Baby Boomer proprietary business owners are expected to retire within the next several years.  Our Transition Advisory Services is a holistic integrated Framework, which consists of a Transition Plan, Transition Growth Strategy, and Strategic Growth Valuation that takes into consideration your financial and personal goals, your Transition Options, the current value of your business, and the development of a customized Transition Growth Strategy to assist you in maximizing the value of your business so that you can easily transition the business on your terms when you’re ready.   

The Transition Plan

Retirement planning is no longer about conducting and overseeing the business’ day-to-day operations but also about the contemplation of a host of transitional options, decisions, issues, and questions ranging from: What are your personal and financial goals and plans, to the impact your transitional decisions will have on the employees, to who will take over or run the business, to how can you maximize the company’s value or price before you decide to leave. Today’s business owner must address a multitude of Transitional Planning questions such as:    

  1. “What is my business currently worth?”
  2. "Will you have enough money to retire and what are your personal financial goals?”
  3.  “Is the business going to be permanently closed or shutdown when you retire, or do you want the business to continue as an entity after your retirement?”
  4. “Will your employees be retained by the new buyer or not?”
  5. “Does the partnership have a buy-sell agreement on the value of your shares?”
  6. “Are you going to pass the business on to a family member, sell it to a third party, or transfer the company to your employees?”
  7. “What is the value of your business now or in the next five years”?
  8. “Is your business still growing, or has it been declining in profits?”
  9. “Do your customers and suppliers know that you are about to retire or sell the business?”
  10. “Are you selling the assets or shares of stock”?
  11. “Is the building lease renewable or about to expire?”
  12. Do you own 100% of the business or a percentage of the business? 
  13. Are you selling your percentage of the business to your partner, or to another shareholder or investor?”
  14. “What other professional advisors do I need to consult with?”
  15. “What are the tax consequences of selling or transferring your business interests?”
  16. Does your partner (s) have the first Right of Refusal in the purchasing of your business interests?
  17. “When do you plan to retire?”  In the near short-term within the next  2 - 3 years, or intermediate timeframe of 5-7 years?”

These are just some of the crucial questions that business owners must consider before deciding what to do with their business, how to plan for their future, and maximize their company’s value.  Business owners should also consider all of the transition, exit, or succession options available to them.

Transition Options

  • Sell the business to a third-party
  • Sell your business interests to an existing partner or other shareholders
  • Transfer ownership through a management or employee buyout
  • Sell or transfer the company to a family member(s)
  • Sell to Employees through an Employee Stock Option Plans (ESOPs)
  • Liquidate the business
  • Sell the business as a Merger or Acquisition (M&A)

The development of various Transition Option Scenarios also allows the owner to begin thinking realistically about which potential buyers or new owners that are not only the “Right fit” for you or your partners but for your employees, customers and suppliers as well before the transition process begins.  

  1. “What are the business goals of the new buyer?” 

  • Will the potential new buyer keep all or some of the existing employees? 
  • Will the new buyer layoff the existing employees, and replace them with his or her own staff?
  • The new buyer may even want to ensure that key employees remain with the business for at least a few months to a year because of their expertise, qualifications, and training? 
  • Will the owner also be available to assist the new owner(s) over the next few months or year to continue and maintain the customer and vendor company relationships during the transition?
  • Will the new buyer request that the business owner sign a non-compete agreement? 

  1. “Should I sell my business to the employees instead”?

If the business owner or partners decide to sell the shares to the employees; the Transition Plan can provide the framework necessary for the gradual transition of the ownership (percentage of shares) internally to the next generation of employees.  This is generally a phased-in approach over the next 3-7 years, which enables the owner to:

  • Determine how many employees are interested in purchasing an interest in the business
  • Properly train the next generation of employees as leaders, managers, and business owners
  • Incrementally reduce the number of work hours of the owner from full-time to part-time during the transition
  • Decide who to select as the Successor
  • Gradually transitioning the owner’s business shares, stocks, or interests to the employee(s) over the time frame.  This allows the employees to now become owners or shareholders themselves over the agreed upon timeframe and sales financing arrangement
  • Ensure that each employee has the financing available to purchase their percentage of shares (e.g., 5%, 10%, 25%, 50%, etc.)

And by buying into the business; the employees now have an even more incentive to grow the company and to maximize its profits and value. 

Depending on the size of the business, the Transition Options, and the owner’s personal and financial goals; business owners also have to consult with an array of professional advisors and consultants to create a viable Transition Plan. 

Transaction Advisory Services

The buying, selling, or transferring of shares of a business also necessitates the advice and counsel of other third-party transaction consultants, advisors, and professionals (e.g. CPA, Business Attorney, Financial Planner, Business Broker, etc.) to carefully review and scrutinize the financial and business records, discuss your retirement goals and plans, as well as examining contracts, Letters of Intent, and final agreements.  These independent third-party transaction advisors include the following:

  • Business Attorneys – to offer advice regarding tax and estate planning matters, to prepare critical legal documents, and to review sale or purchase agreements
  • Certified Public Accountant (CPA) – to calculate business tax basis, prepare financial, cash flow, and tax projections, and financial reporting
  • Financial Planner – to determine the owner’s personal and financial goals, retirement lifestyle, and prepare the cash flow projections for personal and budgeting needs
  • Business Brokers – to assist in the sales/market price, preparation, marketing, and selling of the company.  Most Business Brokers generally deal in the sale and purchases of small to medium-sized main street businesses (e.g., coffee shops, dry cleaners, restaurants, bars, etc.) valued under $2 million in revenues for private individuals
  • Certified Valuation Analysts – to assist in the valuation of the business and/or shares of stock.  Are you going to gift your shares to a family member?  Are you selling your shares or business interests to your partner or other third-party investor?  For tax purposes, the value of the shares may have to be valued.

Coordination and collaboration amongst these professional advisors, consultants, and partners is also crucial in the development and implementation of the Transition Plan and Transition Growth Strategy. 

Transition Growth Strategy and Strategic Growth Valuation

Both the Transition Growth Strategy and Strategic Business Valuation help to guide and aid the business owners in maximizing the value of their company before they retire.

A prospective buyer or new owner will most likely pay more for a business if the owner can show that it has been profitable over the past few years.  Therefore, business owners should begin to ensure that the business will continue to grow to increase its revenues and profitability over the next 2 to 7 years to maximize its value to the fullest. 

We work closely with you to analyze your operations, organizational structure, products and/or services, business plans and strategies, competition, risks, performance measures, and historical financial data to develop a customized Transition Growth Strategy, and financial models to project the company’s growth rate forecasts and projections. 

Our in-depth knowledge of your business also enables us to provide a Strategic Growth Valuation to establish an estimated baseline on the company’s market value at the “Enterprise Level” prior to the owner’s retirement, and to reassess the value when you are ready to sell or transfer the business.

In conclusion, Queen City Consulting LLC ensures that the Transition Plan, Transition Growth Strategy, Strategic Growth Valuation, and Transaction Advisory Services are all in alignment with your overall retirement plans, goals, objectives, options, and choices to ensure a seamless and successful Transition.  Building Value is not only essential to the overall success of any business but also for the success of the Exit Transition as well.  And remember, it’s never too early to begin the Transition Planning processes.

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