Run your business as if you’re going to sell it tomorrow. This applies whether you’re retiring or switching career paths – and whether you’re selling or gifting your business.
Even though you may not literally be selling your business tomorrow, if it’s on the horizon, there are things you should be doing now. Let’s talk about how a monthly accountant can advise you through the process!
At CSI Accounting & Payroll, we’ve provided monthly accounting and unlimited advice to small businesses for nearly 60 years. That means we’ve talked to hundreds of clients about succession planning, answering questions like:
When I hear “succession planning”, I think of planning to sell or gift your business in the hopes that it will successfully continue on. The process isn’t for businesses that will permanently close, so it’s not for self-employed individuals who are the business.
It’s all about running at peak profitability in a way that benefits the business – not just cutting corners to give potential buyers the illusion of profitability. After all, you don’t want it to crumble in your buyer’s hands, especially if they’re someone you have a relationship with (like a family member or an employee), or if the purchase amount is based on future revenues.
While succession planning gets the best results when done over about three years, it’s possible to get your business in good shape in a few months. The timeline gets shorter the more you run your business like you’re going to sell it tomorrow. Then it doesn’t need as much prep work.
How is this achieved? It will vary slightly by industry and the size of your business, but an accountant can provide customized advice. Let’s get into it in the next section!
As the owner of a monthly accounting firm, I normally outline the differences between what monthly accountants can provide and what annual tax preparers can provide. However, it’s important to note that they’re fairly similar in how they assist with succession planning. Let’s talk about similarities and differences.
Annual and monthly accountants can both provide accurate annual tax forms for you to show potential buyers, and they can both offer advice for optimizing your business for sale.
It will also vary by the accountant, but your accountant may even join you in meetings with a buyer and their attorney.
The main differences are that monthly accountants tend to be more available to provide advice, and they also give you monthly financials that show performance comparisons throughout the year.
These help you get in the best shape to sell and build a potential buyer’s confidence in your business.
So, you’re partnering with an accountant for your succession planning. That’s great! But is an accountant all you need to sell your business?
Not necessarily. While accountants can help with a majority of the process, many accountants don’t write up purchase agreements, find you a buyer, or perform business valuations on their own. That means you will require an attorney, and you can optionally partner with a business broker as well.
If you aren’t sure how to find a good attorney or business broker, try asking your accounting firm! They will typically have trusted partners in these areas, especially if they’ve been in business for a while.
Now that you know more about what succession planning is, how accountants can help, and who else can be involved in the process, are you ready to check out monthly accounting services?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with us by clicking the image below: