Business Owners

Business transitions require coordination and clear thinking. Moving forward with clarity requires understanding what’s driving the transition, how it may affect your business and personal goals, and what steps can help you align both.

But what if the transition is unexpected? Whether planned or not, successful transitions rely on a clear decision-making framework that helps you slow down, weigh options, and make deliberate choices that balance business and personal finances.

Even with a framework designed to strike that balance, owners may emphasize business priorities over those that advance their personal wealth priorities. Strong transition plans go beyond transactions like capital, valuation, and operations.

Whether you’re working to create a succession plan or preparing for a business liquidation, successful transitions also reflect your life outside the business. If your transition centers around selling the business you’ve poured your life into, that means having as much clarity around its potential effects on your sense of purpose and motivation as you do about its possible financial outcome.

“Often, an owner’s planning focus is really on the business—not themselves or the impact the transaction is going to have on them,” says Russell Sanders, managing director of Truist’s Center for Family Legacy. “The question for us then becomes, ‘What techniques can the owner use to help make considered, deliberate choices that balance their personal goals with their business priorities?’”

Before you even begin considering how to implement a decision-making process in your business transition and exit planning, Sanders suggests taking time to think about how your brain examines information. In short, there are automatic processing (or fast thinking) and more intentional calculating and planning functions that require extra effort (slow thinking).^{Disclosure 1} In most areas of life, fast thinking is our go-to method for problem solving.

“You can’t change that,” Sanders says. “But what you can do is acknowledge that when you’re about to make an important decision, you need to force slow thinking to engage. For a business transaction, it’s a very important decision to stop and do research, to make sure that you’re focusing on all of the things that you need to be focusing on.”

Review your ownership transition options and plan your alternatives before making a major decision that could impact both your work and personal life. Here’s a practical starting point for ownership transition planning:

Appreciate all the intangibles your business provides: Reflect on the role your business plays in providing personal satisfaction and meaning.

• How will you replace the purpose, daily interaction, and structure that the business provided?
• Which aspects of running the business left you feeling fulfilled, and how can you continue them in new ways?

Understand your alternatives: Explore what’s motivating you and investigate viable alternatives for yourself and the business.

• What’s left for you to achieve professionally?
• What’s the best way for you to exit the business?

Focus on your preparations: Review financial planning objectives and estate planning goals to ensure existing plans still reflect your post-transition, long-term goals. Learn how other successful families have transitioned—and determine what makes sense for your family.

• How can your money move you toward your personal goals?
• How will the deal’s structure impact what funds you have available to invest in a diversified portfolio?

Don’t wait to start preparing

Determining your optimal business transition strategy takes time. Working with professionals, like the Truist Business Transition Advisory Group, can help you develop a thoughtful, well-rounded approach to what comes next.