Are You Really Ready to Sell? Or is it time to get ready because it could take a few years?
What does ‘ready’ really mean? For many business owners this is a gut reaction when I ask, and it usually depends on how burned out or how unhealthy they are.?
Many business owners, even when they feel ready, are not personally ready or their business isn’t ready. Then when we discuss what all is needed to get ready, the business owner is overwhelmed, disappointed, and even angry.
I am sharing this checklist to help you think about what a few simple steps would be to be prepared to transition out of your business even if you aren’t ready to sell today.
- You have spent some resources on getting educated on the exit process, your exit options on how to transition your business. Trust me there are lots of options.
- You have discussed transitioning with your loved ones and, if you have them, your business partner(s).
- Your personal, financial and business goals and objectives are aligned. This can be the biggest challenge when the amount you need for after your transition is more than what you will have after you transition. Knowing this wealth gap now is important.
- You have considered and designed a life-after business Vision and Plan. This plan is linked or part of your wealth management plan which has been reviewed by your trusted advisors. This is where "golfing more" isn't enough. Many business owners have been inside their business for so long, that it can be difficult to image doing anything else.
- You have a completed a strategic analysis, business valuation and personal, financial and business assessment(s) within the last year.
- You have a documented transition plan that breaks down the details of your personal, financial and business goals and objectives.
- You have a documented pre-transition plan including enterprise value improvements & preliminary due diligence efforts underway to de-risk the business, maximize its value, minimize taxes upon transition and improve the probability of a smooth transition to the next owner.
- You have a trusted advisory team which includes at minimum: an attorney, accountant, wealth or financial advisor, business broker, exit advisor, business growth advisor, spouse or partner.?Other advisors you might include: banking advisor, estate planner, real estate attorney, business attorney, ESOP specialist, tax specialist, insurance specialist, foundation / charity, key employees, investment banker, board members, family office advisor.
- You have created a contingency plan which includes buy-sell instructions, appropriate levels and types of insurance, and specifies what should happen if before you transition something was to happen outside of your control that would prevent you from operating your business or force you to transition sooner than planned. You have also reviewed this plan with your trusted advisors listed above.
- You have considered all of your exit options, optimal deal structure, and weighed the pros and cons of each in relation to your personal and business goals and objectives.
If you'd like to learn more about how to prepare for your exit. Just click here to schedule some time.
