Plan ahead for a rewarding transition

Strategic advice

No matter how much you love your business, you may dream of starting a new chapter in your life—retirement, community work, or even a new, different business.


If so, you’re not alone. Forty percent of middle-market company leaders are baby boomers approaching retirement ageDisclosure 1, at a time when companies and investors are eying strong businesses primed for more growth.


Indeed, 77 percent of middle market companies have experienced a transition or expect to in the next five years.Disclosure 1 The key is mapping out your transition early on, so you have a better chance of receiving the maximum value for your business and of feeling good about leaving.

Why early on?

Think of your company’s transition as having two zones: a Green Zone where you can prepare your business and your personal finances for an eventual transaction and a Red Zone where the transition happens.

“Planning for a transition doesn’t mean a sale or transaction is imminent. In fact, it shouldn’t be,” explains Russell Sanders, managing director, Business Transition Advisory Group at Truist. “You need to start planning long before an acquirer or investor comes knocking on your door. Three, four, or five years before a transition, that’s the Green Zone.”

In fact, 98% of businesses that began transition planning 3-4 years in advance were pleased with the results of their transition. Only 33% of those who waited less than a year to prepare were satisfied with their outcome.Disclosure 1

Waiting until the last minute to plan your transition leaves you with fewer options and opportunities. Planning at least two or three years ahead enables you to set goals, maximize the value of your business, and reap the benefits of careful preparation.

Transition playbook

Gain important ground, and increase your potential, in the Green Zone with these strategies:

  • Maximize family and personal wealth - Take time for personal financial planning to ensure you can support your life after transition. If you plan on transferring sale proceeds to family members, you’ll have time to set up trusts or partnerships, work through family roles and governance, and avoid conflicts.
  • Prepare for post-transition goals - Knowing exactly how you want to spend your time after your company’s transition provides direction for your wealth management planning and guides the use of proceeds from the transaction.
  • Boost business valuation - You can’t maximize value overnight. Start now with strategies to increase your market share, profits, and capital efficiency. Keep your books in good order and up-to-date, and make sure best practices can be seen clearly in every aspect of your operations.

Every transition begins with a trigger event that moves you into the Red Zone. Careful planning in the Green Zone gives you more control over the transaction:

Anticipate the unexpected. Most transitions are triggered by unplanned events—an attractive offer from an investor, a sudden change in economic conditions, a family crisis, or a health issue. Now, you’re in the Red Zone, and you’ll be scrambling to catch up on Green Zone work under pressure with little time and fewer options.

Complete your transition in the Red Zone with these actions:

  • Set the leadership tone - Decide if you want to continue to be involved in the company. Whether you’re there or not, you’ll want to find investors who share your company’s values and will safeguard its reputation and your legacy.
  • Complete the transaction - You can’t transition without the final transaction. Find the best deal structure—acquisition, merger, alliance, ownership transfer, or restructuring—for both yourself and the business. Remember, most transitions take anywhere from three to 12 months to complete and sometimes even longer to finalize.

Are you ready for the opportunities from a well-planned transition?

Ask your relationship manager or wealth advisor how Truist can guide you through transition planning for the next chapter in your life.