How to Exit Your Business: Practical Tips for a Smooth Sale
By: Victoria Collier, Coach with Upleveling Your Business
Business ownership is the most exciting, frustrating, exhilarating, exhausting, confusing, heartbreaking, and rewarding adventure ever. Right next to marriage. And, having a business is like being married. It is not uncommon to hear real spouses complain that, “you are married to your business”, and get jealous of the time and attention spent at the office.
There comes a time in every relationship where a person asks themselves, “where is this going?” or “what’s in it for me?” or “can I keep doing this?” or “should I stay or leave?” Businesses are no different. Whether you are a start-up in your first year or you’ve collected 30 years of memories, the voices in your head question you.
During this time of unemployment, small business shutdowns, and uncertainty in the stock market, there are likely a ton of voices in your head. They may include:
- Cut my losses and go.
- Sell now and collect my gains before the industry really tanks.
- A bigger company may want to gobble me up.
- I am tired; I should just walk away.
- Is my business really worth anything anyway?
Replace those voices with:
- Now is the best time to position my business to sell.
- There will be lots of serious companies wanting to expand while others fold.
- I have built a strong foundation that is valuable.
- While others are paralyzed with fear and complaints, I will be pivoting strategically.
I know. That’s how I felt months before I sold my business. The pendulum swung rapidly from one end of the conversation to the next. Fortunately, I had a business coach to get me through, just as I had a business coach when I started my business, and every stage until it sold.
If you have any thoughts of “I Want Out!” here are some tips to help you transition faster with less stress and more success:
- Surround yourself with people who support your ideas during good and bad times; people who will listen without judgment or criticism; people who challenge you to think deeper and grow stronger.
- Review the systems and processes you currently have in place and identify where they could be better and what can be eliminated. The goal is to have at least a minimal level of systems that work autonomously and written procedures that others can follow while working the systems. Systems and procedures have value that will sell, but only if they are written and work.
- Compile your “list.” A good list includes prior, current, and prospective customers; referral sources; and gatekeepers (people who can connect you with others). The key to the list is not how big it is, but how warm it is. How often do you stay in touch with your list (through newsletters, emails, phone calls, cards, lunches, etc.)? The warmer the list, the more valuable it is. If it is currently cold, begin a systematic way to touch them at least quarterly, then monthly. Once you have the system working, then write a procedure around it. Just like that, you have a warm list, with a procedure and system to make and keep it valuable.
- Begin decreasing debt and increasing cash reserves. While a company may want to buy another one with debt (because they can acquire the company for cheap), being cash positive is much more attractive to potential buyers.
- Have at least one strong employee that the new owner can trust and rely on to ask questions and make the transition go smoothly.
- Make a list of anyone you think would or could possibly buy your business. Then, begin putting confidential feelers out in your private network to see if anyone is looking to buy or grow. Don’t overlook your own employees or referral sources.
Once you go through the above exercise, generally, one of two things will happen, you will either love your business again and want to stay, or you will be satisfied with the price you get to “get out.”
Either way, a key to success is to work with people who have “been there, done that.” Don’t be shy about getting help as you work through this process.
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Victoria L. Collier, JD, CELA, CEPA, is an entrepreneur, attorney, business owner, author, speaker, and business coach. After serving in the United States Air Force for six years, Victoria obtained her B.A. in Psychology, and then her law degree. For 17 years she created, developed, and lead one of the pre-eminent elder care law firms in the United States, creating a specialized niche in the Veterans Benefits area teaching thousands of other lawyers. Victoria has sold a few multimillion-dollar businesses and is a Certified Exit Planning Advisor. Victoria recently bought an 87-acre farm, has been married for over 20 years, has 10 year old twins, and just adopted two puppies. She lives life to the fullest and enjoys helping others do the same.