Preparation is the biggest factor when transferring your store to a family member. After spending countless hours to improve your business and maximize your income, the last thing you want is a lengthy and stressful transfer once you are ready to pass on your store. With your future in mind, the following information will help you prepare to transfer your thriving store when the time is right.
First Steps of an Internal Transfer
An internal transfer is when you pass on your business to a family member giving them full ownership. This will give them control over finances, management, and all store operations[i]. Start preparing yourself by going over all of the business documents. Review your personal and business goals, and make sure that transferring ownership will not affect any investments or an investment plan that you may have[ii]. Knowing your current state of business is essential to guaranteeing that your family is set up for success when you pass along your convenience or small grocery store.
Choosing the Right Person
Have you selected who you will transfer your store to? Make sure you select someone who wants to run the store and preserve your legacy, and is not being forced into it. The store will not be successful if the owner does not have the drive to work hard. You should find someone who is flexible, patient, and already familiar with how the store works[iii]. A family member who is already working at the store is usually the most likely candidate. This way you will not have to spend additional time training, and can pass on the store quickly.
Once you’ve made your choice, make sure that you and your family member communicate to understand each other’s goals and wishes for the c-store. Taking over a business can be stressful and you want your family to understand that you support them while also giving them the tools and knowledge you’ve already acquired by being in the business.
Guarantee Your Money Before and After Transfer
The main goal during the transfer process if protecting the value of the store and preserving family wealth. Knowing how much money you will need before, during, and after is essential to a smooth transfer. You can also lower the risk of anything going wrong by looking over your current finances and knowing the actual value of your store. Even if you are wanting to transfer the store in the distant future, creating a financial plan now can prepare you for any unexpected events[iv]. That way if you need to transfer your business sooner than expected you will prevent loss of money, unwanted stress, and overall confusion.
It’s crucial that you consider how you will transfer your c-store to your family member. There are many financial considerations to evaluate, like taxes and maintaining the store’s value. Include your accountant and trusted banker in these decisions, as you want to ensure both you and your family are making the best financial move for all involved.
What’s Next?
An important factor in transferring your c-store is knowing what you will do after you pass on your store. Is the transfer temporary? Are you wanting to start a different business venture? Are you retiring? Part of this transition is being mentally ready to lead the process, and creating new direction for the future. Finish strong at your current c-store, and be excited for the next step in your life. Include your family members through frequent meetings, so everyone feels prepared with the same perspective. Having a united vision will improve business now, setting you up for even greater success later.
You will also want to educate any employees that are not family members about the transfer, so that they will be aware of any possible changes that may occur while also reassuring them that you are keeping their best interest in mind. Even though you are passing your store to a family member, they may have a new vision or new ideas and everyone should be ready to welcome the changes.
Prepare Now, Enjoy the Benefits Later
Not preparing can be disastrous when it comes to transferring your store. Not only will it become a long drawn out process, but it prevents a quick transfer when you are ready to move on. If you are not ready for the tasks and questions that are sure to come, you could unnecessarily prolong the process, causing you to lose time and possibly your wealth which affects you and your family[v]. Your goal should be to protect your legacy, and leave you and your family financially comfortable in the future[vi]. By understanding the steps in transferring your business, planning accordingly, and always communicating with the people involved, you have the best chance at accomplishing these goals.
[i] http://magazine.csnews.com/i/724158-sep-2016/105
[ii] http://www.csnews.com/industry-news-and-trends/expert-insights/how-create-transferable-family-business
[iii] http://www.csnews.com/industry-news-and-trends/expert-insights/how-create-transferable-family-business
[iv] https://hbr.org/2012/01/avoid-the-traps-that-can-destroy-family-businesses
[v] http://magazine.csnews.com/i/724158-sep-2016/105
[vi] http://www.csnews.com/industry-news-and-trends/expert-insights/your-family-business-transferable