22 Dec Around the Web: A Week in Summary
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A recent article from Forbes entitled “The Importance Of Having A Franchise Exit Strategy” discusses why a franchisee should plan for their eventual exit. A business owner may decide to sell due to a variety of reasons such as retirement, health issues, or dissatisfaction with the brand. Planning ahead is critical to the success of the sale.
It is important to understand the clauses and fees in the franchise agreement regarding selling to a new owner. This helps you determine what your options are so you can develop an exit plan. An exit plan helps set goals, encourage growth, develop a timeline, and mentally prepare the owner.
A recent article from Forbes entitled “Exit Strategies For Agency Owners, Consultants, And Professional Services” reviews the challenges and options for exiting an agency. Many agency owners fail to sell and end up simply closing, but this doesn’t have to be the case.
Don’t fall prey to unsolicited offers of unrealistically high values, these numbers will quickly fall. It is also advisable to avoid giving aware shares to employees who aren’t willing to write a check.
The most successful option is to build the agency into a money making machine so that you are making a lot along the way and so that it is very appealing to buyers. Whether it is an external or internal buyer, the higher the value – the higher the sale price.
A recent article from Forbes entitled “Exit Planning For A Sale To A Key Employee” explores the option of selling your business to a key employee. There are many pros and cons to this option that you should be aware of in advance.
Pros of selling your business to a key employee include familiarity with the vision, mission and values of the business, as well as an understanding of the obstacles that you have had to overcome. This can help lead to a higher survival rate than selling to a third party.
Cons of selling your business to a key employee include the fact that many employees are not necessarily going to make for a good entrepreneur, a potentially lower sale price due to a smaller buyer pool, financing challenges, and potential payment issues.