Planning for business transitions should start early

What happens when small business owners are ready to retire or sell their business?

A panel of banking and business experts tried to help answer that question during an Oct. 2 seminar in Anchorage organized by KeyBank.

According to KeyBank’s Amanda Clayton, $10 trillion worth of businesses will change hands by 2025 across the nation, and about 30 percent of family-owned businesses in the U.S. are expected to experience a leadership change in the next couple of years.

The key, the panelists said, is having a business transition plan — and starting to think about that plan long before it’s time to execute it.

John Letourneau, a CPA at Thomas, Head and Greisen, said he learned that lesson when he sold his baking business decades ago.

In 1980, he sold his business for $3,000, and was pretty happy with the sale, which included ovens and mixers. Not long after, his friends sold a cashew cluster business that included a recipe, hot plate and cookie sheets. They got $40,000 for the business.

The difference, Letourneau said, was that they had charts showing past performance and likely growth. He just sold the exact goods.

Letourneau became an accountant, and eventually helped his parents sell their business and get a better deal than he himself got. Since then, he’s assisted in other business sales, and said that selling intangibles is a key advantage.

According to Ed Kirk, about 50 percent to 70 percent of a business owner’s net worth is typically tied up in their business.

Read more at:
Planning for business transitions should start early - Alaska Journal of Commerce - October Issue 2 2014 - Anchorage, AK:

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