My Kids Will Buy It!

Written by James Sanders

I can’t tell you the amount of times I have asked business clients what their exit strategy and they have a look of confusion.  They are so engrossed with running their business that they have not taken the time to think about who could buy it.  On the flipside, there are also many who think that one of their kids will just step in and buy them out.  If you fall into one of these two camps, I am strongly suggesting that you give your exit strategy some thoughts.  So, who or what could possibly be your exit plan. 

Below are some ideas:

1. Competitor – if you are successful, a competitor may be a strong contender to be your acquirer
2. Supplier – sometimes a supplier is looking to vertically integrate; if you are a strong customer for them, they may want to add your business to theirs
3. Employee(s) – a key staff member or possibly all of our employees through an ESOP might be an option; they know the business and you know them
4. Investor – if you are big enough, there is always the possibility that private equity or some type of investor would want to buy you out
5. Family Member – if you have a family member involved (or a few), this could also be a good option

The bottom line is that you don’t have to know exactly who would be your exit strategy, but at least be cognizant that there are many different options. 

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

• 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)
• Understanding the Odds of Selling a Business (NYBB Group)
• The Risks of Under-Reporting Income for Business Owners (NYBB Group)