As everyone who has ever tried to start their own company realizes, owning your own business isn’t just a job, it is an entire lifestyle built around a very important and fragile financial asset. When the time comes to think about the next chapter, employees can retire, but business owners need to orchestrate an exit that will not only serve their long-term financial needs, but also protect and preserve the critical relationships with employees, customers and suppliers they’ve built over many years of late nights, weekends and delayed family vacations.
Chances are you’ve built your business by creating and maintaining relationships with a core group of trusted professional advisors like your accountant, attorney, and a few key employees. You’ve carefully selected these trusted advisor relationships to fill in areas where your personal expertise and available time is inadequate to deliver the high-level results needed for the success you’ve been driven to achieve.
As you think about an exit from your business, following the same strategy of creating business relationships with a trusted professional advisor, is a logical path. This advisor will guide you through the process of selling your company by creating the buyer interest and competition needed to generate multiple offers.
Be wary of any advisor who thinks an immediate sale is always the best decision. This is self-serving advice as most decisions to sell are more nuanced and can benefit from a financial planning process, to determine if the likely, after-tax, cash from a sale will be enough to fund the next chapter in the current owner’s life. Sometimes the best decision can be to stay and continue growing the business in order to support a more comfortable retirement. Other times, a sale is needed quickly due to life circumstances. Only by understanding how the business fits into the context of the owner’s life can a proper decision be made.
The right advisor will work with your other trusted advisors to bring order and transparency to the decision making process. The decision to exit a privately owned business is a big one. Make sure this decision fits into the other key aspects of your lifestyle, and will look just as good 10 years in the future as it looks today.
