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Over the past few weeks, I've met with a number of owners in their 70s and 80s who were in the process of passing along their businesses to the next generation – be it family, private equity or another company.

One owner had been particularly tenacious about hanging onto his business. When he finally decided to sell in 2009, the company's valuation had taken a hit, partly because his appetite for risk had diminished with age.

I also worried about how he'd fare, given his identity and self-worth were so deeply entwined in the business.

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When I ran into him, I asked if he regretted his decision to sell. When he laughed, I was shocked. He then said that he wished he had done it sooner. He had three pieces of advice to share with the next generation of business owners, help them make their transition smoother:

Long time frames. Choosing the right time to sell a business is tricky. But what's more difficult is the amount of time it takes to plan the transition. The most significant hurdle is dealing with uncertainties and variables that must be accounted for, often during early stages of the business, so as to get a good outcome.

"Ask an owner when they would sell, they say five years. Ask five years later, you get the same answer," says Chris Dobbin, who specializes in helping owners achieve a good liquidity event at Precipice Capital.

Owners and their children must counteract this inertia inherent in planning over decades, making a conscious effort to think in terms of those rather long time frames and to set target years to process the transition. Mr. Dobbin says that too often owners stay on until their health forces a sale, which can mean missing the right time in the business cycle.

But the delay can also stem from the fact that owners often have a difficult time separating themselves from the business. "From a purchaser's perspective, the business is much more valuable when there is a clear separation from owner and business," says Mr. Dobbin.

Mr. Dobbin adds that when the company has a strong management team in place empowered to make decisions, and when systems are in place, these companies tend to attract higher exits because a purchaser can readily see that the business has a lot of value absent the owner.

Personal goals. An owner can plan when to move to the role of chairman and continue to participate on the board but with less demand on decision-making. This shift in roles eases the owner into a new timetable, but retains the platform of influence they get from the business. She can look outward and play a larger role in the community. Others get involved in charities and others are surprised to find that they are needed to continue in their industry, participating in industry associations or global forums. Men in particular discover the joy in their grandchildren. Due to business pressure, they didn't have time with their own children and find that they want to play a bigger role in the lives of their children's children.

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Wealth goals. Owners tend to avoid sharing their concerns about paying for their retirement, particularly if they are taking a hefty salary from the business every year. Here is a red-hot alert for children in family businesses; focus on how your parents will manage to monetize their retirement from the business. Once the generations define a good wealth plan, they will discover the older generation is more confident in letting them take on responsibility.

When owners have asked the questions around these three major dimensions and processed the answers through their personal lives and financial planning, they have a far higher likelihood of a positive liquidity event and having a far happier and intact family. Try as we might, no one escapes life's inevitable cycles.

Jacoline Loewen is director of business development of UBS Bank (Canada). She is also author of Money Magnet: How to Attract Investors to Your Business. You can follow her on Twitter @jacolineloewen.

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