Having a plan puts you in control of how the transition will transpire. Not having one could mean an end result that doesn’t align with your intentions.
Helping Business Owners Make Smart Transition Decisions
Whether planned or not, all businesses, including yours, will eventually go through some type of transition that will impact both you and your family as well as your management team, employees, suppliers, customers and the local communities where you operate. There are many factors to consider when creating your ownership-transition strategy. The earlier a plan is formulated and, more importantly, implemented, the more beneficial it can be for all stakeholders.
PREPARE FOR YOUR FUTURE
Too often, owners do not consider or define their transition plan until the last minute, thereby sacrificing potential accretive opportunities to maximize the value of the ultimate event, or to direct the outcome in the way they desire.
City National Rochdale’s Business Owner Advisory team is focused on providing strategic, practical, and objective advice to private business owners and their trusted financial advisors on business transitions, including: understanding various monetization options, considering corporate governance, and keeping a business in the family. The team has extensive experience working with businesses and business owners at different stages of readiness for a transition, across a multitude of industries and geographies.
Most business owners agree that having a transition strategy is important both for their future and the future of the business, yet a majority do not have a plan.1
We help business owners confront the myriad of questions and issues that arise when planning a business transition, including:
- What are the options that I should consider?
- Do I want to transfer wealth to my family? If so, how much and when should I make the transfer?
- Who are the different types of buyers, and what are the considerations in selling to each?
- Does my wealth plan include comprehensive wealth planning for both the business and personal wealth?
- What steps should I be taking now if I want to sell my business in a few years?
- How do I ensure that my family stays in control of my business, if that is my goal?
- How do I respond to an unsolicited offer for my business?
- What are the potential tax consequences to a transition?
- How do I evaluate the economic of a monetization event versus retaining my business?
- Are there tax or planning strategies that I should consider prior to engaging in a transaction?
- Who are the key members of a deal team during a transaction?
- Are there specific charitable organizations or causes that I would like to financially support?
- How do I prepare for an unexpected business transaction event
(e.g., death of a business partner)?
- Will my liquidity and cash flow allow me to maintain my current lifestyle post-transition?
By drawing on our years of experience, we are prepared to help you assess the opportunities open to you and provide guidance as you choose your path.
PLANNING BENEFITS: YOU ARE IN CONTROL
From the day you started your business, you began a journey that ultimately leads to the day you are no longer in charge. Having a plan puts you in control of how the transition will transpire. Not having one could mean an end result that doesn’t align with your intentions.
While we strongly encourage all business owners to begin creating a transition plan early that considers different strategic alternatives, we are ready to work with you and your financial advisor wherever you are along the business life cycle. We have experience guiding business owners through the different phases of the life cycle and can share best practices, insights and knowledge along the way. By starting early, you give yourself time to identify and make improvements to the business that can help drive its value higher. You can make decisions and put plans in place that can help minimize business instability or family disharmony in the event of an unexpected disruption. In addition, early planning helps to better position you and the business should you be presented with an unsolicited offer. Having a partner that focuses on helping you build and prepare for your future, allows you to spend more time on running the day-to-day aspects of your business.
A THOUGHTFUL , COMPREHENSIVE APPROACH
Your advisor and CNR are here to help you navigate the complexities of wealth and business ownership in order to protect what you’ve built. We want to understand your goals and objectives and determine how these goals can be achieved in an efficient, accretive and tax-advised manner. CNR’s complimentary service, Comprehensive Wealth Assessment (CWA), focuses on evaluating and correlating the objectives and needs of your business and personal wealth by identifying gaps and opportunities across your entire financial well-being.
Our process empowers you to make informed decisions that will serve to enable the successful transition of your business and optimize your wealth throughout your lifetime. Once the assessment is complete, you and your financial advisor are well positioned to work with your attorneys and accountants, as appropriate, to implement the recommended strategies.
In collaboration with your advisor, we help empower you to make informed decisions that will enable the successful transition of your business and optimize your wealth throughout your lifetime.
YOUR TRUSTED RESOURCE FOR TAILORED ADVICE AND GUIDANCE
Your success is our goal. Our rich heritage of working with business owners and entrepreneurs alongside their trusted financial advisor and other professionals allows us to provide a full complement of resources and professional insights. Working together, you can feel confident that every aspect of your life, from business to personal, is aligned and that you have an informed path toward the future. If you are interested in learning more about our Business Owner Advisory or Comprehensive Wealth Assessment service, reach out to your financial advisor to understand how City National Rochdale can help.
1 Based on a City National Bank survey of its Private Bank clients conducted in April 2020, 86% of business owners agreed that having a transition strategy was important yet 60% didn’t have a plan.
This web page is for general information and education only. It is not meant to provide specific tax guidance. The information in this document was compiled by the staff of City National Rochdale (City National) from data and sources believed to be reliable, but City National makes no representation as to the accuracy or completeness of the information. The opinions expressed, together with any estimates or projections given, constitute the judgment of the author as of the date of the presentation. City National has no obligation to update, modify, or amend this document or otherwise notify you in the event any information stated, opinion expressed, matter discussed, estimate, or projection changes or is determined to be inaccurate.
City National, its managed affiliates and subsidiaries, as a matter of policy, do not give tax, accounting, regulatory, or legal advice. Rules in the areas of law, tax, and accounting are subject to change and open to varying interpretations. Any strategies discussed in this document were not intended to be used, and cannot be used for the purpose of avoiding any tax penalties that may be imposed. You should consult with your other advisors on the tax, accounting and legal implications of actions you may take based on any strategies or information presented taking into account your own particular circumstances.
This presentation is not to be construed as investment advice or as an offer, or solicitation of an offer, to buy or sell any financial instrument. Financial instruments discussed in this presentation may not be suitable for your individual circumstances. You should make your own investment decisions, using an independent advisor if prudent, based on your own investment objective and financial situation.
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