By Ahmie Baum
As a family business consulting firm, we've observed a common pattern: successful business owners often have 80-90% of their net worth tied to their company. While this reflects strong business performance, it creates complexity when planning for ownership transitions.
The key challenge? Converting business wealth into personal wealth while navigating family dynamics, tax implications, and maintaining business continuity. This requires strategic planning well before any transition occurs.
Begin Your Exit Planning Early
One of the most costly mistakes that business owners make is not starting early enough. A successful exit plan begins with enough time to strategize and implement how you will get the most value out of your business while mitigating taxes and creating enough value to maintain your lifestyle. In order to do this, you need to focus on converting your business wealth into personal wealth.
What most business owners don’t understand is that planning for a successful exit or succession is good business practice even if you don’t plan on leaving soon.
Know What Your Business Is Worth
When it comes to putting a price tag on your family business, it’s not as simple as you may think. It’s important to know all the details of what makes your business marketable to a buyer.
Some of the most important factors are a strong management team, a diversified customer base, and strong cash flow. Some less obvious factors include your physical assets, such as the building from which you run your business, along with your equipment. Additionally, digital assets, such as your website and online presence, are part of your business value.
Most business owners don’t think about all the pieces that create value. That’s why it’s important to have a business valuation done, and we would suggest an informal one to begin with, which is less expensive. Too often business owners run to a formal valuation at great expense and time without yet knowing the direction. Knowing the true value of your business is critical to proper business planning and achieving personal goals. A good informal valuation process can help answer the questions that will lead you to make informed decisions for your future.
Ensure That Your Business Can Operate Without You
This is one of the hardest parts of planning for your business yet the one that significantly increases the value. Buyers pay for self-managing companies where the owner is not critical to the future viability of the business. This is a harsh reality for some business owners. It involves having a strong management team in place with good processes to deliver stronger profits and cash flow into the future.
The most devastating scenarios can happen to us when we least expect it, whether that’s disability or death, and you must be prepared. Most experts suggest a buy-sell agreement linked with a life insurance policy so that your family and business are protected. Another part of succession planning that some business owners might not know about is getting coverage on key employees who can successfully run your business in your absence.
However, if you don’t have someone to pass it on to, it might be wise to start thinking about how you can effectively sell your business while retaining its value—another reason why starting sooner rather than later would be important.
Partner with an Experienced Family Business Advisory Firm
At Interchange Capital Partners, we bring over 45 years of experience helping family businesses navigate complex transitions. As a family business ourselves, we understand the unique challenges of balancing family dynamics with business strategy.
Through our Clarity Foundation™, we help you examine all aspects of business transition planning - from valuation and management succession to family governance and wealth transfer strategies.
Ready to start building your transition strategy? Contact our family business advisory team at team@interchangecp.com or 412-307-4230.
About Ahmie
Ahmie E. Baum is the founder and executive chairman of the board of Interchange Capital Partners, a premier family business advisory firm committed to empowering family-owned businesses. With over 45 years of experience, Ahmie specializes in guiding families to safeguard and grow their wealth through our strategic Clarity Foundation™.
Passionate about helping multi-generational family businesses, Ahmie excels at navigating their unique challenges, allowing them to focus on what they do best. One of his greatest joys is getting to know the firm’s clients personally, listening to their stories, understanding their journeys, and identifying and solving for the challenges that keep them up at night.
Ahmie collaborates closely with clients to help design comprehensive plans that address their obstacles, seize opportunities, and leverage their strengths. As he manages each family's complex and unique situations, Ahmie takes on their challenges as his own, fully committed to helping them work toward achieving their goals. His mission is to guide clients through their uncertainties, enabling them to move beyond their fears and confidently pursue their dreams.
Ahmie began his career at EF Hutton in 1979, eventually rising to the position of Senior Vice President. In 1993, he transitioned to Paine Webber, later acquired by UBS, where he spent nearly 27 years. During this time, he earned an Executive Certificate in Financial Planning from Duquesne University and obtained his CFP® designation. He holds a Certificate in Family Business Advising (CFBA) from the Family Firm Institute. He has been actively involved with Strategic Coach, an internationally renowned entrepreneurial coaching program, for over 20 years. Additionally, he has earned certificates from The Growth Institute, specializing in business growth, scaling, and cash management.
When he’s not working, Ahmie enjoys spending time with his wife, Sara, their three children, and three grandchildren. He recognizes that health is wealth, so he has committed to daily yoga, meditation, and plant-based eating. His other hobbies include woodturning, golf, reading, listening to music, and biking. He is active in his community, has served as the Foundation Chair of the Jewish Federation Community Foundation of Greater Pittsburgh, and supports various philanthropic endeavors. To learn more about Ahmie, connect with him on LinkedIn.
Interchange Capital Partners, LLC, (“INTERCHANGE CAPITAL PARTNERS”) is a registered investment adviser with the Securities and Exchange Commission providing investment advisory and financial planning services. Any reference to the terms “registered investment adviser” or “registered” does not imply that INTERCHANGE CAPITAL PARTNERS or any person associated with INTERCHANGE CAPITAL PARTNERS has achieved a certain level of skill or training. A copy of INTERCHANGE CAPITAL PARTNERS’s current written disclosure (ADV 2A Firm Brochure) discussing our advisory services and fees is available for your review upon request. INTERCHANGE CAPITAL PARTNERS, in addition to providing investment advisory and financial planning services, provides business consulting services. In connection with its business consulting services, INTERCHANGE CAPITAL PARTNERS does not provide tax or legal advice.
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