Get educated and evaluate your exit options!
Are you like most business owners who believe that they’ll simply be able to sell their businesses when they’re ready? If so, you’re likely in for a big shock.
Consider these facts:
Putting your business on the market?
70% of owners are turned away by business brokers and less than one in six are able to consummate a transaction.
Passing on your business to your children?
Less than one-third of family businesses survive the transition from first to second generation ownership.
You might not know this, but there are a number of exit paths that you may take, including internal (selling or giving the business to insiders, such as employees, managers, or family members) or external (a competitor, customer, or investor).
You should learn about the pros and cons of each before you make a decision.
As you weigh the various options, it is important that you understand that different exit options have different transfer values, varying fees and taxes, as well as different personal and business implications. You’ll need to consider which exit strategies will satisfy both your financial (how much money you need) and non-financial (what is important to you) objectives.
Choosing the wrong approach could have unintended consequences for you, your family, your employees, and the company itself.
It pays to get educated and evaluate your options as early as possible – ideally years before you want to step away from your business.