In a previous blog post on Exit Planning and Succession Planning Options, I discussed the many ways to exit your business. When exit planning, we tend to think of simply selling the business one day and receiving a check for the full amount. The reality is quite different. There are so many possibilities, many that may be much more in line with your transition planning needs. As a business owner selling a business, you need to consider the options.
Exit Planning Options – Real, Current Client Examples
It occurred to me recently that my current clients illustrate this in a very real way. It is one thing to walk through potential, theoretical ways to exit – another to be hands-on guiding clients through so many different approaches that best fit THEIR SPECIFIC needs as they build transferable value over time.
At this moment, I am working with clients with a wide variety of exit strategies that include:
- A transition from one Generation to the Next: planning includes business value growth, skills development and “upgrading” marketing efforts.
- An outright Sale to a 3rd Party: work is focused on building revenue, profitability and transferable value to maximize the sale price. Classic exit planning – build value and put it on the market.
- A Merger of two companies: one of the owners buying out the other. Key to success is a focus on building value over time to ensure the company continues to be attractive to the younger partner, who will eventually buy out the senior partner.
- Equity Investor – Partial sale, possibly a complete exit over time: an early stage company with high growth, considering a first round of private equity investment. Eventually, there may be a second round and/or an outright sale.
- Transition to Children: a family-owned company thinking 20 years ahead to the succession planning that will prepare their currently young children to take over the business. All of the foundational work and value growth will provide for alternative exit strategies should the children not end up taking over.
- Keep Options Open: Plan for a third-party sale, with a potential next generation stepping in, to be determined. Working on building transferable value and cleaning up the infrastructure for either eventuality.
Get Started on Your Exit Plan
The past blog post I mentioned on exit strategy options may sound theoretical. I hope these real client examples get you thinking about YOUR succession planning options. Consider the alternatives that may be more appropriate, more profitable and more in tune with how you would like to create YOUR future.
If you haven’t begun to plan, get on it! Get a business valuation done, build your advisory team, start on building business value!
Need help with an Exit Readiness Assessment? Give me a call!
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David Shavzin, CMC
Shavzin and Associates, Inc.
Valuation, Succession Planning / Exit Planning, Building Value for Sale
Atlanta, Georgia
770-329-5224
dshavzin@shavzinassociates.com