Are you one of the millions of people on the brink of retirement with no succession plan?
Are you considering selling your business but not comfortable trusting your clients to someone else?
Are you exploring your succession but keeping your options open?
Do you not know where to start or how to start searching for potential buyers?
If any of these apply to you, StaffBuffalo’s “Business Matchmaking” Program has you covered.
We understand Succession can be a difficult topic for most people, especially those in a professional service who have invested their lives into growing their businesses. In fact, 44% of people retiring with no plan blamed their lack of strategy on either being too busy or their retirement being too far in the future. It’s never too early to start thinking about your succession.
Have you thought about how much your business is worth?
What would your ideal acquisition experience look like?
Who would your ideal successor be?
Planning Your Exit
If you’ve read this far, you’re probably actively considering your options. According to economic data, it is an excellent time to sell your business as the received multiples are very high compared to previous years. While the conditions are practically perfect it does not make a difference if you do not have an exit or succession plan in place.
Here is a basic step-by-step process, to help you on your journey:
Define your exit goals and the ideal outcome you’re striving for
Determine the value of your business and stand true to it
Do a top-down overview of your personal and business finances while keeping taxes in mind
Continue to foster relationships and grow your business during the process of exit discussion
Consider your options:
Should I sell to a private equity firm?
Should I transfer it to an employee?
Should I find a successor or partner and train them?
Are there third parties that are interested?
Examine the culture and personalities of your employees and how they compare to the buyer
Draft documents to keep compensation and bonus programs in-tact to ensure team continuity
Hire a reputable outside consultant to help draft your estate plan
Note: Your exit plan should be an educated decision and it can be an evolving plan; Adapt and update as needed.
Some Thoughts You Should Consider
Your people are your greatest asset! If you want to strengthen and retain your employees, consider their needs and goals before making a decision.
Understanding different personalities is key! Meet the incoming team and identify their personalities. Surround your team with good people and good things will happen. Regardless of the steps you take to minimize loss, you should expect employee and management turnover.
Try and keep your emotions out of it! You have given everything to build your business. It will be very difficult to let go of your “baby” that you’ve grown for decades. Do not let the emotions take control when making a decision.
A large, attractive number might look nice, but numbers don’t tell the whole story! Keep a target value in mind, but do not jump at the biggest offers that come your way. It is easy to get distracted by dollar signs, but what do you envision your company doing after you exit?
Research, research, research! Be proactive and do your research on a perspective buyer before selling.
Plan ahead before you are ready to sell! It’s easier to sell before you need to as this maximizes results. Always be ready to sell your business.
Life changes and so can your exit plan! When organizing your exit document, be sure to review and update it accordingly.
Get the professional financial opinion on a 3rd party transaction! So hire an investment banker and CPA to make sure all financials are in line with your goals!