The Key Benefits of Setting Owner's Exit GoalsOct 24, 2022
By Darren Cherry
Daily, owners deal with myriad decisions associated with running their businesses. As they begin to contemplate their eventual exit, they need to gain clarity on their exit priorities.
For some, the priority will be financial because their main focus is to secure the maximum price. Others will be more focused on preserving the jobs for their existing workforce. Another priority, for some, is on protecting the legacy of the company. Getting clear on the ranking of these priorities is key to selecting the most appropriate exit option.
Selling a Business with Price as the Primary Priority
One of the biggest challenges in selling a business is agreeing on a price for a transaction. The price discussion should also include the following:
- Purchase price of the business
- Price contingencies, including cash due at closing
- Length of time owner's support is required
To highest prices may often come from a buyer with a strategy that does not maintain the company's legacy (name, products, services, and location) and will likely place the employees' employment security at risk.
Protecting Employees During a Business Transitions.
You're selling a business, but your employees are not. They are staying in business. You want your employees to remain with the company after you sell because they are your greatest asset. In many cases, they were vital to your success, and you feel a sense of loyalty to them.
Identifying buyers with a strategy that values the employees is key to protecting their job security during a transition.
Maintaining your Business Legacy After the Sell
Many owners have a business with a brand name that is important to them and, in some cases, their families. Others have a strong sense of community and want their businesses to remain economic contributors to the local economy.
Here, identifying buyers not in your same line of business or geography is vital.
The key to selling a business is preparation. Identifying the right buyer profile before starting the process is essential. Once you have clarity on your exit priorities, you can zero in on the correct type of buyer poll. Your preferences will accelerate the process and avoid seller regret after the sale.
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