Exit strategies for your business are wide and varied: liquidation, intra-family transfer, management / employee buyout, strategic acquisition, IPO, etc. There are no shortage of options, each with its own set of advantages and disadvantages.
Why sell your business?
You may have already gotten some outside valuation from brokers. You already know what your income statements and balance sheets tell you.
Perhaps you don’t have any offers that meet your expectations. Perhaps the outside valuations are lower, much lower, than you had hoped. Perhaps, you simply can’t afford to sell. Not now. Not like this.
Perhaps there’s something else. This is your business. It was started for a reason. Perhaps you like it. Perhaps you simply don’t want to sell it.
You’re told that you need the capital to re-invest in your retirement. You’re told that you are too central to the business.
What of this applies to you?
Different business owners have different situations and I can’t address all of these situations in one page. (Posts on specific options forthcoming.) Here though, I just want to say that for whatever the reason that you may be looking to sell your business, stop and think why you are doing this. You may want to simply cash out and move on. Fine, let’s make sure you maximize the value of the business before you do so. We aren’t brokers and can’t perform those services but we can give you our view of the value of your business based on your numbers. If you’re involved in the day-to-day operation of the business, part of the value of the business is you, the physically present you. Remove you, remove value. A buyer will negotiate with you over that fact. Ask a broker. Step one, we believe, is turning you from owner/operator into Chair of the Board, investor. You can continue to take up responsibilities and tasks that excite you, at least through the interim, but to get maximum value from the business you need to be an owner not a manager or technician within the business. Read Michael Gerber’s The E-Myth for more about that.
Do you really want to sell or do you think the grass is greener in the financial markets? Do you think that the last market meltdown will be the last market meltdown – ever? Do you want to put all of your eggs in that basket? There are smart people to help you with that as well as plenty of smart people ready to help themselves to your money in the process. Tony Robbins’s Money: Master the Game provides a wealth of resources with respect to differentiating between the two groups.
If you’re simply looking for a better place to put your money, why not start with making your business a better place to keep your money? Why not see how that goes? You can always take some portion of your profits out and diversify your holdings that way. But, if you’re already sitting on a cash cow – or could be with the right strategy, well executed – then, well, why not explore that approach more fully?
What would Warren Buffet do?
What if you could reorganize your business so that you are truly an investor – Chairman of the Board, with managers that see to the day-to-day operation of the business. What if you could continue to receive the income from your business without selling it? Keep it in your portfolio? Perhaps, over time, exit via some form of a management/employee buy-out? Or, at the right time, sell to an outside investor/group? Why not wait to exit until you are ready to set it aside, at a price you want?
That is what we can help you with. Starting with your purpose and mission, we can help you to create an exit strategy that gives you the steps to restructure your business around profitability. And, we can help you restructure management so that, over time, you are effectively delegating day-to-day responsibilities to people you trust and have trained and that remain accountable to you.