Planning is key to successful transition
TORONTO, Oct. 21 /CNW/ - According to a recent RBC study on business
succession, one in four owners is considering exiting their business within
the next five years. With 62 per cent of business owners surveyed over the age
of 50 - many may not have made plans for the next phase in the life of their
business. In fact, only 23 per cent of the business owners surveyed who are
considering exiting within five years have a succession plan in place.
"Even if retiring is the furthest thing from their mind, all business
owners need to plan for their future," says Nadia Ceciliot, national manager,
Commercial Financial Services, RBC Royal Bank. "We know that they are very
busy and focused on the daily demands of running their business. But no matter
what stage they are in, having a succession plan in place will help ensure a
smooth transition in the future -- not only for the business, but also for the
business owner and his or her family."
There may be a number of reasons why business owners do not focus on
succession planning. Some feel they just do not have the time; others may find
it difficult to consider a time when they're not in charge while some may not
know how to get started. But the reality is that one of the keys to a
successful future, for both the business and the owner, is a well formulated,
thought-out succession plan.
Building a succession plan takes time and requires professional advice.
The execution of a plan can take anywhere from three to five years to
complete. The benefits of proper planning include maximizing the value of a
business and maintaining control over what happens in the long term.
Tips to successful planning:
1. Get started. Evaluate your personal and business situation as it
stands now; then think about what you want to do in the future and
how that works with your business goals and needs.
2. What exit option is right for you? Do you want to keep the business
in the family, sell to a partner or group of employees, or sell to a
3. Assemble your advisory team. Having the right advisors at the table
will enable you to gain objective advice and develop a sound plan.
4. What's the current value of your business? Knowing what your business
is worth is a key and may also provide the opportunity to enhance
value for when you're ready to transition.
5. Plan your most effective tax strategy. Allows you to enhance your
wealth strategy through an effective tax strategy.
6. Create a personal retirement plan. Mapping out your personal plans
will help you transition and achieve your retirement goals.
7. Communicate, Communicate, Communicate. Before, during and after.
"It's important to note that the creation of a plan is a
multidisciplinary process - the key to which is getting the right help. No one
should do it on their own," adds Ceciliot. "When owners start or grow a
business, they rely on advice from their peers, family, employees,
accountants, lawyers and financial institutions. It is no different when
creating a succession plan."
Throughout October and November, in cities across Canada, RBC will host
"Find Success in Succession" events across Canada to help business owners
start their succession planning. The events will be facilitated by Peter
Legge, founder, Chairman and CEO of Canada Wide Media Limited, who will share
his recent succession experience and then be joined by a panel of advisors.
Participants will also receive a copy of RBC's Guidebook, How to Succeed with
Business Succession Planning, which provides practical steps and
considerations in developing a successful succession plan.
RBC provides specialized financial advice to business and business
owners, including, business transition financing advice, wealth management,
personal retirement and estate planning. For more information on succession
planning, call 1-800-769-2511 or visit www.rbcroyalbank.com/succession.
For further information:
For further information: Media Contact: Jackie Braden, Media Relations,
(416) 974-2124, email@example.com