Interview with Kevin Ballantyne by Hanan Awaad
Starting a business is an exciting endeavor, but many entrepreneurs and businesspersons neglect to plan for business transition. Sooner or later, you might face a situation when your business will go into family succession, or one of the top executives is retiring, or one of the partners is planning for a partner buyout.
To learn more about business transition planning, Corporita Magazine has contacted Kevin Ballantyne, CPA, CA. He is the President of Profitable Wisdom, a company that helps businesses maximize performance and value, plus helps business owners prepare for the transition.
Q. Kevin, thank you for meeting with me today. Let me start by asking you, why it is important to plan for business transition?
It takes special skills for entrepreneurs to start and grow successful businesses. It takes an entirely different set of skills to prepare themselves and prepare the business for a successful transition of ownership.
In most cases when business transition planning is not done, businesses either end of closing down or surviving for only a short time after ownership has changed. Consider that a U.S. Chamber of Commerce Study found that M&A (merger & acquisition) advisors disqualify about 65% to 75% of prospective sellers and only 20% of the businesses put up for sale transfer hands to another owner. Doing the math, it implies that only 5% to 7% of all companies get sold. Even when businesses are transferred to family members, only 30% of those companies survive in the second generation, and only 15% of that make it to the third generation.
When business owners have put their heart and soul into growing their business, it is a shame that they often don’t reap the harvest of all that labor by properly planning for and then either selling it or transferring it to a family member.
Originally posted 2016-10-22 01:07:55.