The ownership transfer involves several issues that must be taken into account very rapidly during the Ground Rules and Planning stage of the transfer. To help you reflect on these issues, you can ask yourself the following questions:

  • Will you keep some shares in your business?
  • To whom will you transfer ownership? Your children? Your employees? A third party?
  • What is the real value of your business? (See the section on due diligence)
  • What is the price that you are asking for your business?
  • If it is a transfer within the family,
    • Do you intend to give or sell shares to your children? And if so, when?
    • How will you divide up the shares among your children?
  • • If it is an employee buy-out,
    • How will you divide up the shares among your employees?

The financial, the tax, and the legal issues related to the ownership transfer will make it necessary for you to consult one or more experts because this complex process should be well thought out and planned in advance. Through their respective forms of expertise, lawyers, tax experts, financial planners, and sometimes even organizational psychologists can help facilitate an ownership transfer.

The management transfer also involves several issues that have to be taken into account very rapidly during the Ground Rules and Planning stage of the transfer. To help you examine these issues, you can reflect on the following questions:

  • What type of transfer are you seeking?
    • A transfer within your family? A transfer to your employee(s)? A transfer to a third party?
  • How do you wish to prepare the new management team?
  • At what point do you wish to leave the management of your business?
  • What do you intend to do when you leave the management of your business?

You will experience this last big challenge of the management transfer when you definitely leave behind the daily management of your business. This is why it is important to reflect on and prepare yourself for your subsequent projects. For many incumbents, the management transfer is an opportunity to undertake strategic projects in the role of shareholder or president of the board of directors of the business, or to undertake new entrepreneurial projects that they have been thinking about for a long time. To develop a better understanding of the type of incumbent that you are and of the predominant issues that you will face during the management transfer, you can do the Quiz: Discover Your Incumbent Profile.

Five Key Challenges and Avenues of Reflection for Facing Them

  • Encourage their talent and foster cohesion with the team that is already in place.
  • Pay special attention to the evaluation of their performance.
  • A good preparation plan for the new team that includes precise activities for the period of joint control is an important asset.
  • Seeking feedback will allow you and the new management team to exchange ideas on a regular basis.
  • Never hesitate to ask for help! Certain persons can serve as intermediaries between you and the new management team. These persons have the experience and the necessary objectivity to allow the new management team to take full advantage of your experience.
  • Use the Lifepath tool to align your interests, your expectations, and your objectives.
  • Any major change to an organization provokes concern, particularly among current members of the management team.
  • Identify the persons that you judge to be essential to the functioning of the business and that it is necessary to retain by way of precise incentives.
  • Interesting these key employees can involve several types of incentives: a plan for offering bonuses, an employee trust, a pension plan, a stock option plan, etc.
  • These agreements must be concluded with transparency and fairness.
  • The management change will also raise fears among employees. This can have an adverse effect on efficiency.
  • Communicate your decision to your employees, introduce them to the new management team, and explain to them the plan envisaged for the transfer of power.
  • Do not exclude your employees. Instead, you should ensure that they become stakeholders in the changes and willing participants in the transition
  • It is of course difficult for you, the managing director, to leave your business, especially if you are its founder and if you have spent a large part of your life there.
  • A difficulty leaving the business behind is one of the main reasons that business transfers fail.

Do the Quiz: Discover Your Incumbent Profile to develop a more precise idea of what to expect and to obtain further advice on how to prepare.

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