Your ExitMap Blog gathers contributions from top exit planning professionals across the country that are indexed into four categories. They include select strategies for planning your exit, ideas for building your company’s value, transfer options you can choose from, or preparing to enjoy your post-exit lifestyle. This page shows the most recent posts from Your ExitMap Blog. If you are seeking a qualified exit planning professional, you can view a map of specialists here.
All articles are copyrighted by the authors, and reprinted here with permission. Each author’s contact information is available via a link at the end of the article.
Most Recent Your ExitMap Blog Articles
Most Recent Blog Articles
Why You Can't Sell Your Business Overnight Business owners are often told they need to get ready to sell their business, why can’t they just up and sell it? The short answer is that they are unlikely to sell it. Listing the business may be easy, getting someone to buy it, that’s the hard part. According to the Exit Planning Institute, only some 20-30% of businesses sell today. Purpose After the Sale Purpose after the sale is one of the biggest challenges for an exiting owner.
Purpose – “Having as one’s intention or objective.”
Many exit planning advisors discuss the three legs of the exit planning stool – business readiness, financial readiness and personal readiness. In our previous two articles, we focused on two of the “big three” components of a successful life after the sale, activity and identity. The third is purpose.
So many advisors point to the 75% of former owners who “profoundly regret” their transition, and say it’s because they didn’t make enough money. To quote Mr. Bernstein in the great film Citizen Kane, “Well, it’s no trick to make a lot of money…if all you want is to make a lot of money.” Personal Vision – Life After the Sale Part 2 In our last article about life after the sale we discussed identity. Even when business owners are comfortable with who they are, however, there is still the nuts and bolts issue of activity.
A business owner spends 20, 30, or (not uncommonly with Boomers,) 40 years focused on running a business. Unless they’ve built a substantial organization that is run by employees, it likely remains their biggest single time commitment right up until they leave. That commitment is frequently a lot more than 40 hours. How to Value Your Business Valuing a business can be an extremely complex process when the audience is the IRS or the Court System, but for most business owners trying to get a sense of their business value for the purpose of a sale it is more straightforward.
We’ve created this guide for business owners to gain a better understanding of the fundamentals of business value and spark some ideas around exit planning. This guide focuses on privately held businesses in mature industries, not tech start-ups. This includes “Main Street” businesses to lower middle market businesses. Let’s group them together and call them “SMBs”, a popular acronym to define small and medium-sized businesses. Before we dive into the numbers, it is important to define the key stakeholders. Personal Vision – Life After the Sale Part I Life after the sale is often both the most important and most neglected factor in exit planning. Although (according to two different surveys in 2013 and 2022,) 75% of owners report regrets or unhappiness a year after the transition, exit plans continue to be constructed primarily around financial targets. In the event you haven’t heard this since you were five years old, “Money doesn’t fix everything.” Superficial Planning To be fair, most advisors include some conversation about “life after” in their planning conversations. Unfortunately, they are often satisfied with the features associated with an abundance of free time. Visiting the family, RV’ing through the country, ... Read more Exit Planning – Lifestyle and Legacy Lifestyle and Legacy are two very different types of owner transition objectives. When we ask a client “What do you expect as a result of our exit planning?” the answer may be about the money, the time frame, or the impact on people. No matter how it is phrased, the response will break down into one of two major categories. It’s either about the owner’s future lifestyle, or the legacy that is left behind. Lifestyle Objectives Many clients want to exit to an enjoyable retirement. Usually, their primary concern is financial security. They want enough money to live comfortably, and to take care of their ... Read more How to Add Millions to The Value of Your Business - Using EBITDA Adjustments As a 5-time entrepreneur who has helped several businesses increase their value, I know what it takes to run a successful business. If you’re trying to figure out what your business might be worth, it’s helpful to consider what acquirers are paying for companies like yours these days. According to Oberlo, the number of small businesses increased from 32.5 million in 2021 to 33.2 million in 2022. This trend shows no signs of slowing down as more and more people are taking their first steps into becoming an entrepreneur. In addition to new businesses, many boomer business owners will be heading into retirement within the ... Read more Stakeholders in Exit Planning When preparing for the transfer of a business, there are many stakeholders who can impact your plan. Some have direct authority or decision-making capability over the transaction, but others may have substantial influence. In general, it’s best to presume that anyone who has a relationship with the owner or the business will have some impact on his or her decisions. Internal Stakeholders Of primary importance are partners and shareholders. Even when an owner has a voting majority, minority partners may have an official or unofficial veto. “Official” comes in the form of supermajority rights. Unofficial may be in the form of a threat to terminate ... Read more Exploring Business Exit Strategies: Definitions, Examples, and Top Types Every business journey has a beginning and an end. Just as you plan how to start your business, it’s essential to plan how you’ll eventually step back or move on. This is where a business exit strategy comes in. Simply put, it’s a plan that helps business owners decide when and how to sell or close their business in an organized way. But, how do you know it’s time? Read ahead to find out. Understanding Business Exit Strategies: Definition and Importance A business exit strategy is a well-thought-out plan that outlines how an entrepreneur or business owner will sell, dissolve, or transition out of their ... Read more How a Business Owner Can Effectively Plan Their Exit Many business owners are finding it difficult to retire or transition out of their business due to a lack of exit planning together with a challenging economic environment. Shrinking cash flow, net income and credit have forced owners into fight-or-flight mode. Several companies have successfully compensated by trying to expand sales and cutting costs. Many small to mid-sized companies, however, have experienced a drop in value, with no end in sight. Owners are also entering the chapter in their life when exiting their business in one way or another is becoming more probable. Unfortunately, the business may not be currently worth what they need it ... Read more |
|
Keystone Content:
Are you just beginning your exit planning journey? Here are two short articles from Your ExitMap Blog to help get you started. 3 Inarguable Reasons How prepared are you to Take a FREE 15-minute FIND A QUALIFIED EXIT PLANNER |
