In the fast-paced world of business, change is inevitable. Whether it’s retiring leaders, shifting ownership or strategic acquisitions, retailers must be prepared to navigate various transitions to ensure their continued success. To effectively manage these transitions, it is crucial for retailers to familiarize themselves with key business terms that underpin such processes. Learn about seven important business transition key terms to better prepare your operation for a business transition.
- Succession Planning: The process of identifying and developing new leaders who can replace the current leaders when they retire, leave or pass away.
- Due Diligence: The process of investigating a business prior to making a purchase, including reviewing financial records, contracts and other important information.
- Letter of Intent (LOI): A nonbinding agreement between a buyer and seller outlining the basic terms of a potential sale.
- Asset Purchase Agreement (APA): A legally binding contract that outlines the terms of a sale, including the purchase price, payment terms and any contingencies.
- Triple Net Lease: A lease where the buyer purchases the business but the seller keeps the real estate the business operates on.
- Consulting Contract: A section of a purchasing contract that requires the seller to stay with the company for a set period of time to assist with the transition.
- Non-Compete Contract: An agreement by the seller to not open a new business that would directly compete with the operation sold.
Listen as siblings Amos and Lauren and their parents Buron and Sara Lanier talk about how Amos and Lauren came together to take over Lanier Do it Best in Burgaw, North Carolina, and keep the business in their family. Sara and Buron talk about the process of transitioning ownership to their children, give advice for other retailers and more.