Small business owners in the day-to-day thick of things frequently don’t put much thought into what they’ll do when they’re ready to get out of business. In fact, the Canadian Supplement to the 2014 PwC Global Family Business Survey found that more than half of family businesses are expected to change hands by 2019 but only 20% have a robust, documented succession plan in place.

This isn’t a surprising statistic as it takes a lot of time and effort to run a successful small business, leaving little time to plan for the future.

The reality is that it’s never too early to plan certain aspects of selling your business. Even if you are years away from retirement, taking steps early on to plan for that day will make the eventual transition faster, easier and definitely more profitable.

Plan the succession. There are three main options for when you retire – transitioning the business within the family, selling the business to a partner or employee or selling the business to an outside buyer. Determining the most viable option and creating a well thought-out transition plan increases the likelihood of maximizing your business’s value and minimizing the tax burdens.

Surround yourself with the right people and put a price on it. There is a saying in the business world that the value of your business is only what someone is willing to pay for it. Although this is true, it’s important to have a good understanding of what your business is worth so that when you do sell, you’ll attract the right investors and be able to negotiate the best deal. There are many factors that affect the value of your business, so it’s important to seek assistance in helping you calculate an accurate value.

Understand your tax opportunities. When your business assets transition to your personal assets, tax strategies need to be considered to maximize your profits. Understanding these strategies early on allows you to be better prepared.

Your business transition plan is never set in stone – it will constantly evolve and change as your business continues to grow and develop. But having a solid plan early on will ensure that your successful business treats you well when you retire.

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