19 Mar Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Axial entitled “The 1,000 Day Exit Plan” discusses the importance of proper planning and preparation for business owners who are considering selling their businesses.
It suggests starting the exit planning process about 1,000 days prior to the intended sale date. This provides ample time to have important conversations with family members, peers, and advisors. It also helps business owners avoid feeling rushed to make such a major decision.
The timeline can be broken down into several steps. First comes learning about the sales process. The next step involves personal wealth planning and cleaning up the business financials. From there, a business owner can move on to obtaining valuations and providing information to potential buyers.
By breaking down the tasks over a years-long timeline, business owners can rest assured that they are providing themselves and their business with enough time to positively adapt to an ownership transition.
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A recent article from Forbes entitled “Ready, Set, Sell: Options To Consider When Selling Your Business” provides insights and advice for entrepreneurs considering selling their businesses, presenting various options for exits.
These options include:
- Passing the business to family members,
- Selling to key employees,
- Engaging with competitors for acquisition,
- Working with business brokers
- Considering private equity investments.
It’s crucial to understand the importance of establishing personal priorities and seeking professional advice to develop a suitable exit strategy tailored to individual circumstances. It’s also important to consider the current economic climate’s impact on business valuations when planning the sale.
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A recent article from Viking Mergers and Acquisitions entitled “Common Reasons to Sell Your Business” discusses eight common reasons why business owners might decide to sell their businesses. These reasons include:
- Business Momentum: Selling a business when it’s thriving can yield the highest returns.
- Burnout Relief: Selling the business before burnout sets in allows owners to pursue more fulfilling endeavors while preventing a decline in business performance.
- New Interest Pursuit: Loss of interest in the current business may prompt owners to seek new opportunities. Selling the business can provide capital for venturing into different industries or starting fresh, leveraging previous experience and skills.
- Financial Concerns: Financial instability or the need for immediate cash can drive business owners to sell. Liquidating the business’s value allows for addressing financial needs such as emergencies, travel, or funding new ventures.
- Retirement Planning: Selling the business after years of dedication enables owners to enjoy retirement while ensuring business continuity. Owners can choose to stay involved as consultants, gradually transitioning into retirement while preserving their legacy.
- Relocation: Whether for personal or professional reasons, relocation may necessitate selling the business. Communicating relocation plans with a business broker ensures a smooth transition for both the owner and the new owner.
- Industry Changes: Shifts in technology, regulations, or market dynamics may require more resources than owners can provide. Selling the business allows owners to capitalize on their current market position before industry changes potentially devalue the business.
- Planned Exit Strategy: For serial entrepreneurs, selling a business is part of the long-term plan. Each successful sale provides capital for investing in the next venture, allowing for continued growth and momentum.
Understanding these common reasons for selling a business can help owners make informed decisions about their future. Seeking professional advice and utilizing valuation services can ensure a smooth transition and maximize returns on the sale.
