Did you ever wonder why one business has buyers lined up willing to pay top dollar while another sits on the market for months, or even years? What do buyers look for in a prospective business acquisition?
“When a man does not know which harbor he is heading for, no wind is the right wind.” —Seneca
The starting point for any type of plan is defining its goals. In the case of planning a business exit that means knowing what it means to “exit your business in style.”
“You’ve got to be very careful if you don’t know where you’re going, because you might not get there.” —Yogi Berra
It is not always easy to interpret Yogi. In this case, perhaps he is advising you to figure out just where you are headed in your business. As you near the time when you will leave behind the daily worries and stresses of business ownership, have you defined your successful exit? Do you know where “there” is, much less how to get there? Unless you set and prioritize your exit goals or objectives, you may have too many, or they might conflict, but in either case you may not make much headway.
In today’s economy, no one wants to spend money on something they don’t need today. So why do you need an estimate of your company’s value when you don’t expect to leave for several or many years?
“I never worry about action, but only about inaction.” —Winston Churchill
“I haven’t decided what I ultimately want to do with my business, or when I want to exit, or how much money I’ll need, or whom to sell to, so how can I plan my exit? Besides, I don’t want to exit right now.”
If you’ve said this, or thought it, you are not alone. Many business owners are either overwhelmed with the thought of exiting or are so busy fighting daily business fires that they assume they cannot plan their exits.
Nora Chapman’s story was typical of most business owners who have made the tough decision to leave their companies. At age 54, she was confident in finding a meaningful second act and was ready to leave her 25-employee advertising business. Nora was thinking of selling to one or two of her key employees and when we met her, her first question was: “Is this the right exit choice?”
Contemplating one’s own demise is far too depressing. So let’s talk of someone else, an imaginary character, Harry Withers (age 54) who owned “Withering Hikes,” a chain of seven retail apparel stores for outdoor enthusiasts on the Western Slope of the Rocky Mountains. One day Harry simply disappeared while scouting new hiking trails.
In all likelihood, you are absolutely critical to the success of your business. Without you, there is no business.
We want to fix that.
With a little luck and a lot of hard work, we can help you become an Inconsequential Owner. Having said that, perhaps a bit of explanation is in order.
Steve Smith was no different than millions of other baby boomer business owners in that the thought of leaving his business was never far from his mind, no matter how far away his exit might be. He daydreamed about transferring the business to his oldest daughter and perhaps to a member of his management team, yet he couldn’t gauge their passion for owning a business, and hadn’t tested their management skills.