Category Archive: Business Structure

1. Business Succession Planning:

   It’s Never Too Early to Start!

   By: Eric Treworgy 

   If you own a business—or are thinking about starting one—you’ve probably envisioned what life will look like when it’s time to retire. But for many small business owners, planning an exit strategy is often put on the back burner until the moment they’re ready to sell. Unfortunately, waiting too long can lead to disappointment when a business broker reveals the market value of the business—sometimes far less than expected. At that point, owners face two choices: spend a few more years optimizing operations to increase value or sell for less than they had hoped—just when they were ready to enjoy that long-awaited cabin by the lake.

   The Reality of Business Sales

   The statistics can be discouraging: only 10-20% of small businesses listed for sale actually sell. The rest are often forced to close, selling off physical assets instead. But you don’t have to be part of that statistic. With the right preparation, you can make your business attractive to an outside buyer—or even transition ownership to your employees.

   What’s Ahead

   Over the next few months, I’ll introduce key concepts to help you successfully plan your business transition. Topics will include:

   • The most important factors that determine your business’s value
   • Different ways to sell or transition your business
   • How to get started with succession planning

   Key Questions to Consider for Succession Planning

   To start thinking about your business transition, ask yourself these important questions:

   1. Retirement Readiness – Have you budgeted for retirement, and do you have a financial goal for selling or transitioning your business?
   2. Your Role After Transition – Do you want to stay involved in some capacity, or are you ready to fully step away?
   3. Legacy and Community Impact – Is maintaining your business’s role in the community important to you?
   4. Understanding Your Business’s Financial Health – Do you have a clear picture of how much your business contributes to your personal finances (Seller Discretionary Income)?
   5. Potential Buyers – Have you identified any businesses or individuals who might be a good fit to take over?
   6. Financial Documentation & Transparency – Are your financial records clean, organized, and able to show consistent income? If you’ve been under-reporting income, are you prepared to adjust your strategy to maximize your business’s documented earnings?
   7. Operational Independence – Have you trained your staff to run the business without you? If you took a two-week vacation, could the business operate smoothly in your absence?

   A Final Thought: Selling to Your Employees

   One option you might not have considered is selling your business to your employees. Employee ownership is a growing trend, and there are innovative financing options available to make this transition easier.

   Planning ahead gives you more control over your future and ensures that your business continues to thrive. Start thinking about your succession strategy today — you’ll thank yourself later!

   About Eric Treworgy

   

   Eric keeps an office at URCI and is a business advisor for Coastal Enterprises (CEI) in Brunswick, Maine. He has more than 35 years’ of entrepreneurial experience and specializes in business start-up, strategy, sales and marketing, retail, food and beverage, computer software, and operations management. Through CEI, Eric offers free confidential business advising to help navigate the start-up process, your succession planning, and everything in between.

2. How to Return to Work Post-COVID

   As COVID-19 vaccinations become widespread and infection rates decline, many businesses are discussing how they can return to their workspace safely while accommodating the new work styles that have emerged from the COVID-19 pandemic. What’s the right way to go back? Would your team work efficiently in a new or modified format? Keep reading to learn more about how your business can combine remote and in-office work or even shift its business model to maintain a cohesive and productive team after COVID-19.

   1. Turn to your employees and stakeholders for ideas.

   Your employees are your strongest asset – and the ones most affected by any changes to workplace rules. Conduct a survey of your employees to determine how and when they would feel comfortable returning to work. Be sure to welcome and encourage innovative ideas regarding returning to your workplace. If you’re a solo entrepreneur or a one-person team, think about what would work best for your customers, clients, or other stakeholders. Do they prefer to meet in person? Do they prefer to have a physical location to visit you in, or are they accepting of virtual meetings? Would it be more cost-effective for you to work or attend meetings in a coworking space as needed, and work remotely most of the time? Use these insights from your industry, employees, and customers to lead your plan.

   2. Choose a return model that makes sense for your business.

   Every business has different needs, policies, processes, and clientele. Even businesses in the same industry or with similar product offerings operate differently! Keeping this in mind, and using the information you gathered from your employees and stakeholders, choose a return model that works best for your business. According to the Harvard Business Review, there are five primary models that businesses have been implementing for work after the pandemic. Options include returning to “business as usual,” meaning going back to work the way it was before the pandemic, hybrid models combining remote and office work, and all-remote options.

   3. Use this time as an opportunity for growth and positive change.

   You have been given the gift of opportunity – opportunity for reflection, opportunity for growth, and opportunity for positive change. Use this time to evaluate your previous business practices and determine if they should be modified. Is this the right time to hire a new employee? Could this be the right time to improve your internal processes or upgrade your product offerings? In the same survey to employees and stakeholders, ask for opinions about current processes and what positive changes may go hand in hand with your post-COVID work model.

   While the pandemic hasn’t completely gone away yet, we are beginning to see the end approaching. Now is the time to plan for your business’s workplace updates and strategies post-pandemic, and ensure that those changes are beneficial to your key stakeholders. If you need a physical workspace in Maine, contact the Union River Center for Innovation today to learn more about our private offices and coworking space.