Best Time To Think About Selling – Always

Written by James Sanders

Last week, we attended an interesting presentation on ESOPs.  No, I am not talking about fables.  These are a form of exit strategy where a business owner sells their company to their employees in a structured manner where the employees buy in over time (yes, this is very simplistic and we will describe this in more detail in the coming weeks).  This brings up the important topic of exit planning for business owners. 

According to a 2022 study done by SCORE, over the next 10-15 years, there are 12 million+ businesses (and the number grows each year) that will be sold.  More importantly, the study also indicated the vast majority of these business owners have little to no exit strategy despite the fact that the proceeds from the sale make up a large portion of their retirement.  Over the next few weeks, we are going to address the following topics:

• How do you prepare your business for sale?
• What are the types of ways you can exit?
• What to expect in a sale process?

Below are some good articles that address this very topic at a high level:

• What’s Your Number? A Guide to Building Transferable Business Value (FocusCFO.com)
• How To Sell Your Business: What To Do Before, During, And After The Sale (forbes.com)
• Close or sell your business | U.S. Small Business Administration (SBA.gov)
• Strategies to Know Before Selling a Business | Penta (barrons.com)
• What Is a Business Exit Strategy? Definition, Types and Uses | Indeed.com

 
Whenever I talk with my business clients, I will get asked the question about the best time to start planning for an exit.  My answer – Always!