Should I Stay Or Should I Go?
One of the most difficult decisions a business owner will make in his or her life is deciding whether to keep or to sell their business. Allen Business Advisors understands how difficult it is to make this decision. Our job is to ask the tough questions, have difficult discussions and provide valuable advice to help you arrive at the right decision for you. We will work with you to develop your customized road map. We believe the best results come from a process that takes place well before the sale. This process addresses these questions and many more:
- How much money will you need annually after you sell the business?
- What is the likely sales price range?
- How do you structure the business for sale to maximize your value while minimizing your taxes?
- How do you position the business to find the right buyer?
Figuratively, for many business owners selling a business is similar to dropping their child off at a distant college on move in day. Do you recall this day? Your child worked hard for this moment their entire life. A lot of time has been invested in preparing for this moment by visiting the colleges, completing the paperwork, waiting with nervous anticipation for the colleges’ answers, choosing which college to attend, buying the room decorations, and communicating with the future roommate. Yet, with all this preparation and time invested years in advance, it was still emotionally difficult to let go. You were grateful that you did your research, took the time to prepare, and made the right decision. Years later you look back with pride and joy on this decision with the impact it made on your child’s life and yours. You cannot imagine not having made this decision.
You will experience a similar process and emotions when you sell your business. The question to you is: What are the repercussions if you choose not to prepare years in advance for sale of your business?
The benefits of exit planning are —
- Attracting more and better buyers
- Increase enterprise value (goodwill)
- Increase cash proceeds
- Reducing your tax burden
- Smoother and more orderly transfer
- Prevent costly and avoidable mistakes
Only 18% of business owners do exit planning; of those that do, 92% successfully transfer their business.
88% of business owners do not do exit planning; of those that don’t, only 12% successfully transfer their business.
Our Exit Planning Process
Our process helps you define your goals, understand your financial position, evaluate and plan for the likely type for buyer for your business. (Key employees will view your business differently than an out-side third party.)
Next, we prepare your business for transfer. This usually involves taking the owner out of the business. With professional service businesses the owner is the dominate player (and asset). Nobody wants to buy a business without the key asset. We work to make your key employees stay with the buyer.
Lastly, we ensure that your family is protected by updating your estate plan.
An Exit Planning Team Is Needed
Allen Business Advisors uses a team approach to develop your customized road map because no single professional advisor has all of the expertise needed to design a comprehensive, integrated exit plan and implement it. Each and every team is different because we incorporate your existing advisors onto the Exit Planning Team. Your advisors know you, your business and are trusted for a reason. Allen Business Advisors only fills the missing seats.
The best exit plans incorporate input from a team of advisors that includes —
- Business Transition Attorney
- Estate Planning Attorney
- Financial Advisor
- Business Broker (Allen Business Advisors).
- Commercial Loan Officer
- Life Coach
- Exit Planning Coordinator (Allen Business Advisors)
Some of your advisors may play multiple roles. Sometimes additional team members with other areas of specialties may be needed.