b'W hether you like it or not, at some point youre going to havekick a project down to the offseason to-do list, especially when it seems to transition out of your business. Despite that inevitability,years or even decades away. The issue here is that even when a transition according to a recent survey, 96 percent of small businessmay feel as if it is in the distant future, you never know when a sudden owners agree that its important to have an exit plan, yet 58 percent ofillness, life-changing event, or global pandemic can advance that time-thosesameownershavenotransitionorline from years away to months or weeks. succession plan in place. Why is this?Or worse, what would happen to your loved The issue here is thatones, employees, and longtime customers if We think its because most boat tour op- something was to happen to you tomorrow? erators are pretty busy people. They haveeven when a transition employees to hire and train, customers toWith all this in mind, the time to start plan-attract and delight, boat repairs to take caremay feel as if it is inning for transition is now, so weve laid out of, U.S. Coast Guard regulations to com- six steps you can take today to set yourself ply with, bills that need to be paidthe listthe distant future, youup for the best possible transition outcome goes on. When youre busy running a busi- in the futurewhatever that means for you. ness, it can be hard to step away and thinknever know when a about bigger, long-term planning.life-changing event can1. GET YOUR BOOKS IN ORDERHereatChenmarkwevereviewedthou-Unfortunately, many owners in our spaceadvance that timelinesands of businesses for sale. The very first have the majority of their net worth tiedthing we ask for is three years of financials up in their business. With no clear retire- from years away toand a list of capital expenditures so we can ment/transition/successionplan,own- understand your business, see if its a fit for ers are all too often forced to be reactivemonths or weeks. us, and start discussions on valuation. If you when it comes time to exit, which risksdont have readily available and accurate fi-a suboptimal outcome for them person- nancials, it will be very hard for you to sell ally, their families, their employees, and for the company legacy thatyour business. Paying a professional bookkeeper to help you put these theyve worked so hard to build over the years. togetherat least one year ahead of a salewill pay you back ten-fold during the sale process. It should come as no surprise that those who start planning for transi-tion early on tend to be the best prepared when it comes to retirement.Apart from being able to provide information to sellers, the better you The problem is, as a small business owner can relate, its all too easy tounderstand your financial and operational data, the more likely you are OPTION REASON QUESTIONSPHOTO OPPOSITE PAGE: WEI ZENG / UNSPLASH, CHART THIS PAGE COURTESY OF CHENMARKTransfer to KidsKeep it in the family Kids InterestStructure Flexibility LiquidityWealth TransferManagement BuyoutEasy Transition Out StructureEasy on Stakeholders Financial Capability Reward Your Senior TeamEmployee StockFavorable Tax Break Expense & Complexity Ownership Plan (ESOP)Sell to Your EmployeesTimelineOutright SaleSignificant Cash Up-front Unknown BuyerQuicker Transition OutDue Diligence9 JUNE 2022'