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V O L . X X V I N O. I X W E A LT H M A N A G M E N T / R E T I R E M E N T N ate Bacon began contemplating a transition plan for his business almost as soon as he founded it. It was 2011, not long after the 2008- 09 recession. It was difficult to attract experienced talent for his small struc- tural engineering firm, Base Design Group in Portland. "We started by hiring graduate stu- dents and then grew at a slower pace from the bottom up," he says. As the firm evolved, Bacon wanted to provide a path for employee advance- ment to top leadership positions and, ultimately, partnerships. A year ago, he met with his firm's accountant, David Jean at Altus Exit Strategies in Portland, to begin developing a conceptual plan. e next step was coming up with a for- mal execution strategy, beginning with an initial business valuation, a process begun earlier this year. en the pandemic hit and Bacon paused the planning process. Priorities changed as the firm, like all businesses now, tackles the daily challenges of operating in a drastically altered environment. "What's most important at the moment is dealing with the unique challenges that each new day brings as we all work together to get through these challenging times," he says. "When the time is right for our full team to return to the office, we can pick up on some of our more mid- and long-range goals. It's not an issue of whether or not we are going to be here in two or three months or a year from now, although there is some uncer- tainty about what it might look like on the other side. What's kept our plan from moving forward is prioritizing the needs of each passing day to ensure our business continues operating success- fully until the day comes when we are all able to return to the office." Bacon's circumstance isn't unusual. Many business owners have put the planning process on hold. "Everyone I know who was work- ing on some form of succession plan — a sale of the business to employees, a transition to the next generation, a purchase of another business, a sale to an outside party, and an ESOP in the works — has put everything on hold," says Jim Lyon of Summit 9 Consulting, a business coaching and consulting firm in Yarmouth. "e reasons vary, but boil down to uncertainty. Too much uncer- tainty reduces the value of companies and reduces the willingness and ability to transfer leadership." Running out the clock Transition plans — sometimes called succession or exit plans, depending on the goals and structure — are consid- ered an important part of owning a business. It's about ensuring business continuity once the owner or owners exit, while also achieving the depart- ing owner's goals. Considerations when crafting a plan include the owner's goals in trans- ferring the business to others, and the structure of the transfer, perhaps as an outright sale or a gradual transfer of owner interest. Some advisors say the planning process should start when the business starts, as an integral and dynamic consideration that changes as the business evolves. Yet many owners don't think about it until they're ready to retire, says Lyon. Tough year for an exit strategy The pandemic is complicating succession planning B y L a u r i e S c h r e i b e r F O C U S Nate Bacon Nate Bacon, owner of the structural engineering , owner of the structural engineering firm firm Base Design Group Base Design Group in Portland, began a in Portland, began a formal transition planning process to ensure formal transition planning process to ensure a line of succession as the business matured. a line of succession as the business matured. The process was interrupted by the pandemic. The process was interrupted by the pandemic. P H O T O / T I M G R E E N WAY M AY 5 , 2 0 2 0 20 S O U R C E : White Horse Advisors/Institute for Family-Owned Business EXIT STRATEGY 96% of owners agree an exit strategy is important 13% have a plan that is current and written

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