Entrepreneurs are all one and the same. We have our own traits that have helped us achieve success, of course. But when push comes to shove, we all possess pure grit, unrelenting determination, and a strong desire to be out in the wild rather than in the weeds.
When the realization hits that you’re ready to exit and move on to your next endeavor, your natural instinct is to just go for it. While a primal mindset is great in business, it can lead you astray in a business sale. Before you set the course, take a moment, step back, and:
1. Have a Plan
Selling your business isn’t as simple as coming up with a price and getting someone to agree to it. Owner readiness, business readiness and market readiness must all be in alignment, and you need to develop a roadmap to get there.
Recognize the difference between a wish, a dream and a plan. To quote our previous article:
“When you have a plan, you have something to work toward and measure against. Instead of picking a sale price because it sounds nice, we can calculate how much your business is really worth. If it’s not worth what it needs to be in order for you to achieve your dream, we can identify how to get you there.”
And remember, your plan involves other people who need to be aware and onboard. Selling your business to key employees? Confirm they want to stay and lead after you leave. Passing it down to family members? Make sure they truly want to continue operating the business instead of going their own route.
2. Prepare Mentally
It’s not going to be easy – we can promise you that. But neither was building the business, right? You are better qualified than your spouse, your heirs, your employees or your advisors to find the right exit. If you won’t plan for yourself, then look around you at all of the people who are counting on your business to live. Do not leave this to them without a plan; it’s just not fair and always ends poorly.
You are accustomed to managing many different responses to every decision you make, and you’re going to need that skill now more than ever. There’s the emotional side, the business side, the personal side, your retirement, your family, your employees…countless factors to take into consideration. Expect your exit to take a year of deep planning. If the business sells sooner, great. If it takes longer, stay locked in.
3. Build Your Team
Doctors don’t perform surgery on themselves. Lawyers don’t represent themselves in court. Business owners don’t sell their business alone. Again, this is much more than deciding you want to do it and figuring out the rest as you go. There is risk. There are consequences. If you do it right, your reward will be sweet. Designing the plan does not mean you have to retire. Retirement does not equal death. You can continue to work while knowing there is a plan in case anything happens. Planning ahead—rather than in an emergency—provides much better results.
Just like you need a team around you for your company to function properly, you need a team dedicated to your business sale to help it go smoothly. Your CPA, financial planner and attorney should all be involved, with a business transaction expert running point. Let Exit Consulting Group work alongside you and your team to plan, implement and execute a successful strategy for the sale of your business. Learn more.