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Utah Business Consultants
Business owners often hear the question, “Are you ever going to put your company on the market?” The response of the potential seller is usually unique, varying from, “Sure!” to “not in a million years” to “everything has its price." Most do not think of a specific date, but rather place the broad “when the time is right” qualifier over their sale. Bad circumstances could force the sale of their business, but the majority of firm owners seem to continue on their way, assuming that as long as they sell the horse before it dies, they’ll get a pretty penny.
4 Styles to Exit your Business
Really there are four options in the way of exiting your company. (1) The first is the inheritance option. Children or another member of the family carries on the legacy. This only functions as an option if you have a child that is content to continue with the same career for his or her whole life. (2) The second is the sale to a close friend or your favorite employee. Usually this fails due to a lack of funds available to buy the business outright. (3) The sale of your company to an outside party is a clear option. You get the largest chunk of change possible and continue on to new possibilities. (4) You can liquidate your company. This step is usually taken in the face of emergencies and is almost always the least attractive option.
When Does the Vision Take Shape?
He who can think further ahead usually wins the chess match. In business it is no different. The sooner you can have an exit plan, the more likely a successful exit will be. Begin to analyze now what options you have. If no child or relative shows an interest in your business, you’re down to 3 options. What’s more, small to mid-range businesses usually will not have the depth in their employee base to provide an adequate successor. Liquidation is a sad and arduous process. Truly the best option for the majority of these business owners is found in outside purchase and expansion of their firm.
He who can think further ahead usually wins the chess match. In business it is no different. The sooner you can have an exit plan, the more likely a successful exit will be. Begin to analyze now what options you have. If no child or relative shows an interest in your business, you’re down to 3 options. What’s more, small to mid-range businesses usually will not have the depth in their employee base to provide an adequate successor. Liquidation is a sad and arduous process. Truly the best option for the majority of these business owners is found in outside purchase and expansion of their firm.
The day to begin planning succession and exit is the moment that you begin to organize your business. You don’t know when disaster will strike, but you can sure be ready for it when it comes. Lamentably many owners lie waiting until sickness, bankruptcy or other misfortunes force the untimely sale of their firm. A few realize that they just have no more desire to face another day of work. They’ve worked themselves into a routine that just has lost its appeal. If the slump is ongoing, it’s time to exit.
The day to begin planning succession and exit is the moment that you begin to organize your business. You don’t know when disaster will strike, but you can sure be ready for it when it comes. Lamentably many owners lie waiting until sickness, bankruptcy or other misfortunes force the untimely sale of their firm. A few realize that they just have no more desire to face another day of work. They’ve worked themselves into a routine that just has lost its appeal. If the slump is ongoing, it’s time to exit.
Each seller wants the most cash available when exiting their business. If you haven’t considered how you’re going to do it, the best day to start planning is now. You need a team. A professional brokerage will provide you with your basic operating unit of a broker, a lawyer, a financial assistant, and a CPA. You should have at least an annual meeting to make sure your plan is up to date.
Wayne A. Simpson CPA, CBI is a Managing Partner at Utah Business Consultants and a Certified Business Intermediary with the International Business Brokers Association. Utah Business Consultants is a full-service Business Brokerage and Valuation firm.