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If you’re planning to exit your business, or even just thinking about it, you probably understand the importance of advisors. Have you also considered the importance of cohesion on your advisory team?

Those who specialize in taxes, finances, valuation, etc. will give you crucial advice about your transition process, and they can serve you better when functioning as a cohesive team rather than siloed individuals. A coordinated set of advisers will work from a common understanding of what you want the transition to look like. As they guide you, they will all have the same end goals in mind.

Without that cohesion, you may get conflicting advice from different advisors. Many business owners in this situation feel caught in the middle and confused about which course of action is best. This lack of coordination can make your work exponentially harder.

So how do you build cohesion on your advisory team? Here are a few strategies to get everyone on the same page.

Plan Ahead or Pay Later

Identify your guides in advance and bring them in on the overall plan for your transition.

You may be tempted to deal with issues “as they arise” during the transition process, searching for each relevant advisor only as you need them. But this piecemeal approach can set you up for confusion and cost you money.

If you receive conflicting advice from different team members, you’re forced to spend much more time with each one to reconcile the differences and align everyone’s vision. Those billable hours add up. A coordinated team, on the other hand, can get the same job done with less work.

Selecting Your Team

It’s one thing to know what types of advisors you need. It’s another to find the individuals best suited for the roles.

What should you look for in an advisor? If you want a good exit experience, adhere to strict standards when vetting candidates.

  • Transition expertise—Each team member should have experience with past business transitions. This is non-negotiable.
  • Industry experience—Depending on their role, candidates who have worked with companies in your industry can be offered an advantage but overall competence, trust, and experience outweigh industry-specific expertise.
  • Licensure—Double-check the licensure of every advisor. Licensing agencies should be able to tell you if the individual is in good standing with the organization, how long they’ve been licensed, and if they have garnered any complaints from past clients.
  • Values alignment—The people on your team should share your values.
  • Trusted referrals—A capable professional should be able to provide a list of clients they’ve worked with who will attest to their skills. If a potential candidate can’t furnish you with such a list, it’s a serious red flag.
  • Personal chemistry—Do you get along with this person? Do you feel safe having them beside you for one of the most important decisions of your life? Do they get along with the other members of the advisory team?
  • Trustworthy—It should go without saying that anyone on your team should be trustworthy.
  • Willing to walk away—We all love to close deals, but a trustworthy professional will be able to recognize when their interests and your interests are not aligned. If they aren’t the right fit for your team, or if you change your mind about continuing with the transition, they should be able to gracefully exit the process.

Also, consider who will be involved in selecting the team. Will you put the team together yourself? Will you have help from others? If multiple people help to select team members, make sure your advisors don’t have divided loyalties to different people within the company. Every adviser should prioritize the health of the transition, not just the interests of whoever selected them.

Orient Your Team with S.M.A.R.T. Goals

As you think about what you want from the transition process, what legacy you want to leave behind, and what you want the next phase of life to look like, make sure that your goals are SMART:

  • Specific
  • Measurable
  • Actionable
  • Realistic
  • Time-bound

SMART goals are an easy way to orient every member of your team to your needs and desires. They offer concrete ideas and clarity.

Coordinate Advisor Entry and Exit

The transition from business ownership is comprised of four stages, and you won’t necessarily need every advisor during every stage.

  1. Exploratory Stage: This is when you make decisions about how and when you want to transition and what you hope to get from the process.
  2. Strategic Stage: In this stage, you make a concrete plan for the transition with actionable items.
  3. Execution Stage: You now execute your plan and make the transition happen.
  4. Transition Stage: You, your former employees, business partners, and loved ones will all have adjustments to make once you have transitioned away from ownership and/or daily involvement with the company.

You will need the expertise of different people at different stages of transition. For example:

  • A wealth asset manager or CFP will likely be with you through all four stages to guide the transactions according to your financial goals.
  • We recommend finding a valuation professional early in the timeline to develop a ballpark idea of your business value. And because many aspects of your transition can affect the valuation results, you’ll likely need this valuation expert again during the strategic phase, when you have a clearer picture of what the transition could look like.
  • An investment banker is most useful during the strategic and execution stages, because they have broad experience with business transitions and understand the logistics.
  • A third-party or independent guide brings value to your team throughout all four stages. They will put your interests first and, ideally, be far enough removed from the situation to see things objectively.

Just because different advisors enter and exit at different stages doesn’t mean you can wait until the last minute to find them. Remember, planning early and providing SMART goals will likely lead to a better outcome. Find advisors you trust well in advance, and when it’s time for them to enter the process, they’ll be better prepared to work for your vision.

Need advisors? Trelus can help.

Trelus was created to support business owners who are considering or planning an exit from their business. With our network of seasoned advisors, we can help connect you with the professionals you need on your journey. If you have questions about finding the right advisors, email us at [email protected].   These insights come from the Trelus Transition Readiness Webinar Series.  To access these webinars and other Trelus resources, create your free account here.

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