When Words Are Not Enough

By Tom Kirk

When I was first beginning to entertain the idea that maybe, someday, but sooner than later, I may want to sell all or part of my business, I reached out to my business attorney to get assistance. They were doing a great job helping me to comply with the formalities of corporate existence, like documenting our annual shareholder meetings, filing our state annual reports, preparing employment agreements, and the like. But I was surprised by the response I received when I asked for help with the legal matters surrounding a possible future transition of my business. They offered to reduce to written documents whatever deal I struck with a potential purchaser, but that I needed to bring the particulars of the deal to them first. I thought my business attorney was going to help me determine those particulars that I needed to address, but apparently I was mistaken.

Just in case my attorney’s perspective about what they could (or could not) contribute to a business transition plan was unique their background and experience, I reached out to another law firm that was known to have partners who specialized in mergers and acquisitions. We had a great meeting with those partners where they shared how many various and different business transitions they had helped orchestrate over the recent past. But when I asked what some of their first steps were, it was all about legal documents again – they reviewed shareholder agreements for accuracy and completeness; reviewed compensation agreements, existing buy-sell agreements, minutes of shareholder meetings, etc. While all this would eventually be an important part of a business transition implementation, this meeting with the partners did nothing to encourage me to move forward with their firm. This documentation review was not the first step I needed to take, nor do I suspect is the first step other business owners want to take who are thinking about transitioning their business.

Then I discovered The Transition Roadmap DeveloperTM; a transformational process that takes into consideration the practical, financial and emotional aspects of your unique business transition challenge and delivers a customized step-by-step plan of actions.  Through this process, a business owner will be able to work out the answers to the tough questions that surround a business transition, such as: Why do I want to transition my business?  What do I want to accomplish for myself and for others? Who will be the next owners? When do I want this transition to occur? How much do I need to receive for my current business ownership?  The answers to these questions will help empower owners to develop a business transition roadmap that leads to an agreed upon memorandum of intent with a potential purchaser. Through using this process, owners will be able to come with the particulars needed to take to an attorney.

Getting all the legal documents prepared and executed can be the most painful part of the entire transition process. It can take over six months of effort, chasing down every possible worst case scenario and its contingency plan, which can result in upwards of $80,000 of combined buyer and seller legal fees! In the end, business owners will hopefully have come to a deal with which everyone is happy. Going through this stage of a transition it is clear that spending the time at the beginning working on your business Transition Roadmap is vital. The Roadmap helps business owners push through that painful legal work and provide clarity about what the endgame would be which motivates and excites an owner, like me, to see it happen.

Please don’t get me wrong. I know words are important, documents contain those important words and attorneys are the best qualified to put them together.  It’s just almost impossible to start with a focus on the exact words of legal documentation when you are first thinking about transitioning your business.  A plan, or Roadmap, is a necessary tool to have before you begin and The Transition Roadmap Developer is what created that Roadmap for me.

All small businesses transition eventually. Don’t let the obstacles of legal jargon and documentation create unsurmountable road blocks to your progress. Call today and schedule your complementary consultation with one of our WealthCoachesTM to see if The Transition Roadmap Developer is the process you may want to investigate for improved clarity in this critically important area of your personal and business life. Our wealth services firm in Satellite Beach, FL – Melbourne/Brevard area can be reached at (321) 773-7773.

You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.