“Confidence comes from being prepared.” ~John Wooden
In the first part of the Top 5 Consequences of Not Being Prepared to Sell Your Business, we talked about just how risky it is to not prepare to sell your business – for you personally, your business, and your family’s financial security.
The top three consequences are:
- Not Being Able to Afford to Sell Your Business and Retire
- Limited Exit Planning Options
- Not Being Able to Keep the Family in the Business
Let’s take a look at the last two consequences you may face by not planning for your exit.
- Being Taken Advantage of by Unscrupulous Potential Buyers:
Business owners often think that the sales process is all about waiting for someone to approach them and then just completing a bunch of paperwork to close the deal.
In reality, you need to be proactive and cast a wide net to find the right buyer. If you are approached, you need to be sure of an interested buyer’s intentions and their financial resources to buy your business before you share any financial or business information, or you put yourself at risk. Following proper protocol and planning in advance will allow you to find the right buyer and correctly handle unexpected prospective buyers.
- Not Being Mentally Ready to Leave Your Business:
Owners need to extract themselves from the business and determine what they will do after stepping away.
Often, we find that owners’ identities are very intertwined with their businesses – being CEO is who they are and gives them their feelings of self-worth. Separating yourself from the business is a process that takes time. You need to ensure that you are mentally and emotionally ready to leave your business and find other activities or interests where you can make a difference.
It is critical that you take time to prepare yourself and your business, so that you can avoid these issues and evaluate all of your exit options, maximize business value, groom successors, and implement tax planning strategies.
We encourage you to develop and implement your exit plan at least 3 to 5 years in advance. It takes time, but is worth the effort. Ensure that your exit is successful by planning in advance!