Whether you’re looking to retire, exit an industry, split with partners, or just don’t want to run your business anymore, proper exit strategies are essential.
1. Explore Mediation if You Have Partners and Want Out
Getting the help of a business mediator can add incredible value if you’re looking to exit a business where that may get complicated with existing partners.
Mediators will work with you and the other parties in your business to be sure that you are able to leave the company and dissolve your ownership in a way that works. This can include facilitating settlements, scheduling meetings, and conference calls, as well as helping to maintain privacy and cooperating during mergers and acquisitions.
By touching base with some third-party mediators, you’ll be able to engineer the best agreement for your company’s needs.
2. Have Your Business Properly Valued
There are an exponential number of candidates out there who could be ready and willing to buy your business if you can produce accurate historical and financial information.
You’ll need to get a proper valuation as a first step towards this to know where your company stands and how you can ensure a positive return on your investment at selling time.
A proper preliminary analysis of your business should cost you between $3,000 and $10,000 in most cases. Subsequent comprehensive studies can cost you upwards of $35,000 depending on the size of your business and what type of player you intend to sell your business to (private equity or family office, for example).
By starting with this type of professional analysis, you’ll learn how much your company is worth, what sort of sales price you can expect in today’s marketplace, what strengths and weaknesses your business currently has, and so much more.
Is your business exit ready?
If you’re planning to exit your company in the near future, you may find EastWind’s Exit Strategy Playbook helpful in developing your own exit strategy, making your company more sellable.
3. Consider How You’re Going to Sell, Transfer, or Liquidate the Business and Your Ownership Interest
What’s the end result you’re shooting for?
When you can answer this, you can reverse engineer and decide your best course of action to take today to start moving towards that.
For instance, if you are just trying to cut your losses and get a nice check for your troubles, selling out might be best. If this is more of retirement and you’d like to pass the business on to family, it’ll involve facilitating a transfer.
If your business has a lot of assets, liquidation could be best.
Get the advice that’ll steer you in the right direction. Above all, be sure you know what your next “pivot” is.
Many people seek exit strategies not just to get rid of a business, but to start a new professional and personal lifestyle. It’s easier to get through to the other side when you are honest about what you want next.
4. Get the Help of a Business Lawyer
Finally, you’ll always need another set of eyes for the legal end of things.
This way, you’re able to protect the sale or transfer and can weigh every potential downstream implication of negotiating points as they come. Research some business attorneys early in the process so you can get the assistance you require.
Consider These Exit Strategies
Exit strategies are absolutely necessary when you’re making a transition with any business. Use these four tips and you’ll be taken care of.