Every business owner needs an Exit Strategy………especially if they are not ready to sell.
Every business owner will leave their business at some point. It’s absolutely a sure bet. The question is do you leave on the best possible terms or does the way you leave the business jeopardize the future of the business, the value of the business for you and your heirs and put your employees in the unemployment line.
Too many business owners have difficulty imagining the time and the circumstances that will determine when they will leave the business. Most think that someone will just walk into the business one day and make them an offer to buy the business that they can’t refuse. The reality is that’s a 1 in a 100 shot.
Here’s what usually happens…. One day the business owner gets news they didn’t expect but it is news that forces them to sell the business and execute an Exit Strategy…even if they don’t have an Exit Strategy! What kind of “news” does the business owner get? Here’s the list of the most common items: a serious health issue is diagnosed, a spouse files for divorce, a partner dispute erupts and, frequently, the kids tell you they don’t want to take over the business. There are many more examples. These things can happen suddenly in even the best of families and circumstances.
Good to know: “Our clients who achieve the best results in a sale are the ones who started preparing for a sale long before they decided to sell.”
How can a business owner plan around the unforeseeable? First, and this is critical, run your business like it’s always for sale. If you are managing the business this way, when something comes out of left field at least the business is positioned for a sale that will give you the best opportunity to maximize the value, minimize the time needed to complete the sale and minimize the stress on you and your family.
Let’s assume you are not ready to sell but you are ready to put together an exit strategy. What’s involved? There are a number of things to consider. We can review your business with you and make recommendations about changes that can increase the net value to you when you are ready to sell.
Areas for our review:
Corporate structure, buy sell agreements, tax issues, customer concentration issues, supplier issues, key managers, intellectual property protection and many other areas. Once we have identified these areas for value enhancement you can begin the process of positioning your business for a very profitable and low stress sale….. whenever that might be. And it may be sooner than you think.
Once we have the pieces of value enhancement identified we can assess the best potential buyer types. Is your company a better fit for a strategic buyer or a Private Equity Group buyer?
After we’ve determined a market value for your business we can work with your accountant, financial planner and estate attorney to work out the best, most efficient structure to maximize the value you receive while minimizing the tax burdens that can be painful if not prepared for in advance.
The bottom-line, now is the time to start working on an Exit Strategy, don’t wait for the unexpected….it’s called unexpected for a reason. We’re ready to help get you started.
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