Learn what you should be doing to prepare for an Exit.
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In a survey conducted by a Midwestern university several hundred business owners were asked "What are your plans for business succession - to pass the company on to your children/key employees or sell to a third party?" Seventy percent (70%) responded that they planned to pass the business on to children/key employees and 30% responded that they would sell to a third party. Several years later these same business owners were contacted. Of those that transferred ownership, about 30% passed the business on to children/key employees and about 70% sold to a third party. The reality was that the vast majority sold to a third party even though their original intent was to pass it on to children/key employees. There are several reasons for this - the major reason being that it creates the biggest payday.
So now you plan to sell to a third party in 2-3 years. What are you going to do after you sell your business? Will the proceeds from the business support that? Do you know the type of buyers that may be interested in acquiring your company and what they're looking for? Is your company ready for sale? What can you do to maximize the value of your company in the eyes of prospective buyers? In summary, do you have a well thought-out plan? Transferring ownership of your business may be the biggest financial event of your life - you should have a plan.
Another survey, this one by ROCG, an international consulting firm, asked several hundred business owners who wanted to exit within 3 years if they had a plan. Eighty percent (80%) responded in the negative. The same survey asked "what is the most important objective in the sale of your company?" Eighty percent (80%) wanted to maximize the transaction amount. A good strategic exit plan gives you the best chance of receiving the maximum transaction amount.
Conversely, lack of a plan can cost you a lot of money. How do I know? It happened to someone I know. See the blog below titled "Strategic Planning".
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