Business transitions are not an option, they are a certainty that all business owners will face at some point. Whether for a sales opportunity, the search for new challenges or unexpected circumstances, the key to guaranteeing the continuity of our company and maximizing its value is in planning.
However, in my experience as a consultant at Exit Planning, and in my latest survey, I have found that 84% of small and medium enterprises (SMEs) in Argentina do not have a documented transition plan. Although 91% of the owners recognize their importance, only 16% have taken concrete measures. This gap between awareness and action limits our strategic options as business owners, but can also significantly reduce the value of our businesses before a transition.
The transition as an opportunity. For many of us, our company represents the work of a lifetime and concentrates between 80% and 90% of our wealth. Having an output plan is not only a prevention measure, but a tool that allows us to decide when and how we want to take the next step in our trajectory.
A well structured transition plan is not just about preparing for unforeseen events, it is being ready to take advantage of unexpected opportunities, such as an attractive purchase offer or the possibility of diversifying our time into new projects. Planning is not a retirement signal, it is a strategy to ensure that the company continues to generate value and grow with a new vision.
SMEs: The engine of the economy that needs planning
According to data from the National Institute of Statistics and Census (INDEC) and the Ministry of Economy, SMEs represent 99.3% of companies in Argentina and are responsible for most private employment. Despite our importance, the lack of preparation for the future compromises our stability and development.
A business without a defined transition strategy faces difficulties in attracting investors, accessing financing and maintaining its competitiveness. On the other hand, those of us who work in the professionalization of our management and in the documentation of our output plan are better prepared for change, and we can increase the value of our company in the market.
Family businesses: challenges and opportunities. The leading report indicates that 62% of the SMEs surveyed are family businesses, where transitions can be more complex. 30% of family businesses claim not to have a family member prepared to assume key roles. In addition, 22% are not certain on this issue, while 27% consider that only some members are trained. On the other hand, 24% of the owners have never discussed the issue of succession with their environment, 11% do so in periods greater than one year and 12% addresses the issue once a year.
A planned transition protects business stability and at the same time allows next generation leaders to receive the necessary preparation to assume responsibilities. The professionalization of the process is key to avoiding conflicts and ensuring the continuity of the company with a long -term vision.
Exit Planning: A path to sustained growth. The Exit Planning is a strategic tool that helps us build more solid and sustainable companies. A well -designed plan allows to know the true value of the business, identify improvements in the operation, evaluate possible buyers or successors, and establish strategies to maximize their growth potential.
Planning does not mean that we must immediately make a transition, it gives us options to make informed decisions, when we decide to do so and at that time be prepared. Companies with well -structured transition plans are more likely to sustain themselves over time, generate employment and continue contributing to the economic development of the country, and having more attractive and valuable companies, may probably be transcendent companies, among other things that do not depend on their owners .
A future with more options. Business transitions are inevitable, but can be managed in a positive and strategic way. Companies and their owners who can incorporate these practices within the business and day to day, can transmit a legacy, also strengthen our competitiveness, growth and as owners have greater “freedom” and options.
It is not about planning to sell (of course it is one of the alternatives, but not the only one or the most important), but to ensure that our company transcends beyond us and continues to generate value over time. The key is to anticipate, prepare and turn each transition into an opportunity for evolution and growth.
* Gustavo Schut Consultant Specialized in Exit Planning and author of “The reinvention of the owner” Gustavo Schutt, consultant specialized in Exit Planning and author of “The reinvention of the owner”
By Gustavo Schut
