No attention to exit strategy. No attention to value creation.
“I am tired, and I want to sell but I don’t know what it’s worth or how to design an exit strategy for selling my business.” We hear this from business owners over, and over again.
To sell your company, to make it both sellable and valuable, you need to take the time to design an exit strategy, work on succession planning, and get focused on value creation – long before putting it on the market for sale.
Two questions I frequently hear from owners: “So, what do you think, should I start my exit strategy now? They usually know the answer – they should have started long ago. The second question is: “What do you think it’s worth?” On this question, they often have some outsized value stuck in their mind.
In talking with hundreds of business owners, I know that they are usually:
- Feeling tired and would like to get out. While they do not want to put in much more time or invest in building value, they are not satisfied with what it is worth today.
- Putting off a succession plan for a generation-to-generation transfer. They may feel they have time, or that their children (children often in their 30’s and 40’s) are “not ready yet”. They may fear losing an income stream as they transition out of the business.
- Taking no time to develop an exit strategy that could dramatically increase their business valuation when it comes time to sell. They are simply working in the business.
If you think that your timing is two to three years out and that you can therefore keep putting this off, you need to understand that “two to three years” is NOW, especially if you are in your 50s, 60s, 70s or older. The sale process itself can take 9 – 12 months, or more, from start to finish. And you can’t “time the market” for selling your company, just like you can’t time the market with your investing in the stock market.
With all of what’s going on out there in the world, an exit strategy is critical to monetizing your life’s work! A sudden downturn could keep you captive in your business for another few years as you try to rebuild.
By the Way, It’s NOT all about YOU!
Without an exit strategy, you are not just risking your own retirement, or the next phase of life. You are putting in jeopardy your spouse, children, their families, your employees, their families and more.
Not sure where to start? Consider these questions:
- Do you know the value of your business?
- When do you want to be completely or mostly out of the business?
- Can you make it through the next downturn?
- Do you have a solid plan for what you will do after your exit?
Let’s discuss the sellability and value of your company!
David Shavzin, M&A Advisor
Business Sales, Value Creation, Exit Strategy, Succession Planning
Founder and President, The Value Track, Atlanta, Georgia
Co-Founder and President, Exit Planning Exchange Atlanta
770-329-5224 // [email protected] // LinkedIn