Happy 4th of July, everybody! I hope this finds you well and all your grills firing at full speed!
Today I’m going to continue to write about the backbone of America – privately held companies.
Last month I introduced the concept of how most privately held companies are built by owners over their entire lives, but few have actually planned for their exit (selling the business).
I covered the reality of what happens when owners don’t plan for the day they leave the business. The reality is that circumstances take hold, (most commonly an illness) and the company goes into crisis mode. Planning, training, sales growth stops. Weeks, months, go by. Rumors circulate. Key employees leave. And in many cases an owner’s life’s work is liquidated for pennies on the dollar. Even the best laid plans can go astray.
So how do you plan for the day you would like to sell your business? While there are many many ways to sell a business, doing it at the last minute when a family emergency happens is often not the best way to go. No matter how long you have to plan your exit, there is at least one planning guide you can follow – The Value Acceleration Process ©. The Process is a methodical, logical way to evaluate where a business owner is on the road to maximizing revenue on selling the business.
The Process consists of three broad parts – Discovering the status (and value) of your business now, Preparing to sell, and then Deciding how to sell. Options here include an internal sale (such as to a key employee or family member), an external sale (such as a private ownership group), or a merger (such as a competitor or peer company).
Not surprisingly some business owners get reenergized by going through the Process and decide to keep the business and not sell!
Key milestones exist at the end of each stage in the Process to pause and reflect. Some of the action items the business owner can take include rearranging personnel, obtaining additional training, identifying operational weaknesses, and doing an initial valuation.
For more information on the Value Acceleration Process, visit www.exit-planning-institute.org
That’s all for this month. Have a good July everybody!
NEXT MONTH – Breaking down the Discovery process for a business owner.