Selling Your Business. This is the second in a series of articles that will provide information to business owners who are starting to think about exiting their business. Should you wish to learn more about how to plan for your exit, contact Donald Stevens at firstname.lastname@example.org or visit http://www.donaldstevenscfo.com/.
You have had a bad week. You lost a long-term customer to a competitor. Your best salesperson is getting married and moving to Boston. Your primary supplier just informed you of a product shortage. You have had it. You are done. Let’s sell this business and move on with life.
We have all had those weeks when nothing goes right. Of course, next week is probably going to be better. Life generally evens out like that. There will come a time and there will be circumstances where you will seriously consider selling your business. Well before this point you need to understand and prepare for your eventual exit. The first step in preparation is to assess where you are today.
In considering your level of preparation to exit your business you must assess two dimensions, your financial readiness and your mental readiness. The answers to these questions will influence both your timing and the types of buyers you consider.
For most business owners, their single largest asset is their business. Long-term successful business owners have become accustomed to the opportunities that a business provides for providing certain perquisites of life that are not generally available to W2 employees. So, what will your financial life look like once you sell your business. The most effective way to determine this is to sit down with your personal financial planner to discuss your goals and assess your current financial position. You will discuss many factors including what do you want to do with the rest of your life (travel, hobbies, community service, second career, etc.) Your financial planner will crunch the numbers and give you an assessment of your current financial readiness to exit your business. If your financial readiness is not quite where you would like it to be, s/he will help you develop a plan to get there.
Now that you know how financially prepared you are, it is time to assess your mental readiness to exit. Let me present a few situations:
Do you love what you are doing but concerned that all your financial assets are in one basket? You may not be ready for riding off into the sunset quite yet. But how do you take some chips off the table without exiting?
The business has taken its toll, you are ready to leave, NOW. The problem is your financial readiness is not quite what it needs to be. To make this work, you will need to get top dollar for the business. What type of buyer is most likely to provide the highest multiple for your business?
Your financial readiness is pretty good. You are ready to slow down. You have a daughter (trusted employee, etc.) you would like to pass the business on to, but they are not quite ready to run it by their selves (or they are). Of course, they don’t have the financial assets to buy the business from you. How do you structure an arrangement where you sell the business over time to your protégé?
These are just a few of the situations that business owners may consider as they start thinking about exiting their business. There are answers for each of the situations presented which will be discussed in a future article. If you are ready to start planning your exit now or would just like to know more about what exit planning is all about, contact me, Donald Stevens at email@example.com or visit http://www.donaldstevenscfo.com/.
B2B CFO® https://www.b2bcfo.com/ has several resources that educate business owners, assist in developing exit strategies and ultimately assist in the execution of those exit strategies for owners of privately held businesses. These include The Business Sale Solution Seminar™ which is an educational program developed to prepare business owners for the journey they will take when selling their business. The Exit Strategy Handbook is a companion to the Seminar, providing further detailed information on selling your business. Our B2B Exit® Software serves as a project management tool and an internal valuation tool for preparing your business for sale. Most importantly, there are the B2B CFO® Partners, 220+ strong, located across the USA, each a highly experienced financial professional, and ready to guide you through this adventure.
Are you ready to begin planning for your eventual exit from your business? It is never too early to plan. Contact Donald Stevens, a B2B CFO® Partner, at firstname.lastname@example.org or visit http://www.donaldstevenscfo.com/.