Exiting Your Business - Do You Have A Game Plan?
Eventually, you will begin to think about exiting your business. Planning your exit strengthens your company today while adding long-term value. You have worked hard and made sacrifices to build your business, we think that you deserve to sell your business on your terms, not someone else’s terms.
Do you want to sell your business or do you have other options? To exit on your terms, you need a plan. Think about it... an orchestra conductor works from a score, a contractor works from architectural drawings, and a football coach works from a game plan. Why? Because they know that a good plan yields good results.
Here are some things to think about as you develop your exit plan...
Ask Yourself: Do I Want to Sell My Business?
For most business owners, selling a business is the obvious choice. But you do have other choices. Do you want to pass the business on to family members or key employees? Maybe a sale of only part of the business would meet your goals by letting you partially cash out and stay involved in the business. Is selling your business to an industry player the best for you?
Your Needs and Goals Determine Whether You Should Sell a Business
Deciding how you want to exit your business is inextricably intertwined with your needs and goals. You want to win the game – but first you need to determine what game you are playing.
For example, rather than sell a business, you may want to pass your business to your children and retire. We often encounter business owners who want to do just that. Many, however, realize that the business is their financial nest egg and their children would have to pay them out of the business profits over time.
Taking the bird in the hand approach, you may decide to sell a business to a third party and get cash at closing rather than hoping that your children can grow the business and pay you in the future. Why? Your need for financial security that selling a business to a third party would bring you may outweigh your desire to pass the business on to your children.
Deciding whether to sell a business or pass it to your children is not an easy task. Now is the time to start prioritizing your needs and goals. When you are through, you will know the playing field and be able to develop a successful game plan.
As you prioritize your needs and goals, ask yourself...
- What do I need to be financially strong enough to retire or buy another business?
- What is most important – money, employee retention, family succession, company legacy or culture fit?
- Do I need cash at closing or risk that my children or employees will successfully grow the business and pay me for the business over next 10 years or so?
- Is this the right time to exit my business?
- What will I do after I exit the business?
- Do I want to stay involved in the business after a sale?
- Do I need to improve the business to realistically realize that sale price I want?
The Right Business Broker Is A Great Help When You Sell A Business
Selling a business is not for the inexperienced. Selling a business is like a ballet – every step must be carefully choreographed to ensure that you get the best price on the best terms. Every misstep along the way will cost you money. Business buyers are poised to pounce on every mistake you make, and they see those mistakes as opportunities to buy your business at a lower price.
As business brokers, we know that you are an expert at running your business, but how often have you had the occasion to sell a business? If your answer is not very often or never, we would appreciate the opportunity to use our knowledge and experience to choreograph your businesses sale so that you receive the best price on the best terms.