Optimizing the sale of your company should not be a DIY undertaking. A business sale is complicated, not a do-it-yourself activity. This is not like selling your home. Business owners can and do a lot themselves, we all do.
The riskiest thing you can do: The most complex transaction you will ever likely engage in is the sale of your business. Selling your company by yourself, your life’s work, is just too risky. This is true from a legal perspective and a financial perspective. And when most of your net worth is tied up in the company, you cannot afford big mistakes as you work on exit planning.
Engaging a professional team to help you sell will maximize the sale price, optimize terms, and minimize the risks inherent in such a complex transaction. Your professional advisory team should also include expertise in exit & succession planning.
Selling baseball cards on eBay or selling your used car might have low financial risk. And we do not recommend selling your house by yourself even if you can get good data on comparable home prices. It is definitely not a good idea to do so with your company. This is even more true through the chaos of COVID, economic challenges and changes, uncertainty in politics (impeachment, a new administration, new potential tax changes, trillions in federal spending), as well as issues tied to your industry.
One current client example: the first offer that came was a business value at about 30% of the number now under discussion. On their own, our client may have taken that first offer up by 100% but they would most likely not have taken it up more than 200%. Every case is unique but investing in the right advisory team will help you maximize what you walk away with for retirement, or whatever your plans may be.
Are you ready? A few thoughts: Sell Now? Wait For the Economy?
Call if we can help you think through your specific situation. Always happy to have a conversation to provide some guidance on business valuation, exit planning and the transaction.
David Shavzin, CMC, Exit Strategist
Transactions, Value Growth, Exit Planning, Succession Planning