Selling a business comes with a huge number of variables. The following consider 9 important areas you need to work through if you want to successfully exit the business you own.
1. Do I need to create and use a team?
Putting together an exit strategy and then executing it is a team sport. Don't try and do it on your own.
Members of your team to consider include:
- - Accountant or tax agent
- Personal financial planner
- Psychologist or Business Coach
- Insurance expert
- Business Broker
Are you worried about the cost? Get it right and it won't be a cost but an investment.
2. Determine your goals and objectives before moving forward.
Be patient with yourself; Be patient with those around you.
How long did it take you to get here and now you are here - what's the rush? Taking action before you determine your goals and objectives can waste time, waste money, lets things that can't be undone and/or cause unintended damage. Once you determine your goals and objectives - take action.
3. What are the tax consequences of selling the business?
Are these tax consequences manageable or not?
Talk to a tax agent to understand the implications and what strategies can be used to minimize taxes.
4. How much income do you need to maintain your lifestyle?
Talk to a personal financial planner to make sure you can achieve your goals. If you can, what are you waiting for?
5. Does the fear of spending the rest of your days playing with your grand kids keep you awake at night?
Talk to a psychologist or business coach to plan your future. Get that degree you always said you wanted to get, learn to fly or scuba dive or be a mentor or join a board or become an advisor or coach a new business owner or master public speaking or leap...then look.
6. What would happen to the business owner if there was a medical or worse, fatal incident?
Talk to an insurance specialist and put coverage in place that protects the business owner and any immediate family that need to be taken care of.
7. Are legal matters up to date and decided?
Talk to an attorney to make sure all legal matters are fully understood and addressed. Family trusts, wills, powers of attorney etc require refreshing... just in case.
8. Is there a natural heir to the business or is selling the business or finding a new owner required?
Talk to a Business Broker to explore the above.
- - Is there a natural owner to take over and run the business?
- If the business has more than one owner, what should be discussed and implemented with any ownership changes?
- Can this be done to minimize disruption?
- If not, what's the end game and is professional help needed?
- What is the date to complete all the changes?
- How much is the business worth?
9. Establish a deadline and take action
Now there is a clear plan it's time for action.
Create an advisory team to execute the plan and hold your team accountable; especially yourself.
Consider a leader to execute the plan - yes - delegate
Conduct exit planning meetings to review schedules, assigned tasks and new information and ideas.
The success of an exit strategy for a business owner starts with the business owner. If the above are discussed, executed and aligned, the rest will take care of itself.
About the Author:
Andrew is a 5-time business owner that loves helping entrepreneurs exit or enter business ownership. His services include business brokerage; helping owners sell and/or buyers purchase a business. He also provides consulting on purchasing a franchise, certified machinery and equipment appraisals and business valuations. To ensure this is done to the highest standards, Andrew carries the CBI designation from the International Business Brokers Association and the CBB from the California Association of Business Brokers. Appraisals for Machinery & Equipment are certified with the CMEA designation from the NEBB Institute. Andrew carries a Brokers License from the California Dept. of Real Estate, is a member of the Sacramento Metro Chamber of Commerce and the Sacramento Chair of the California Association of Business Brokers. Andrew is available for speaking engagements. How can I help you?