It’s not over till…
We all know the phrase. As the owner of a small business you may not want to think about it – but you will eventually have to face the reality that your role as owner will end.
When facing this reality business owners typically think of a few broad categories. Will you meet an untimely end and leave the business in the hands of ill-prepared heirs? Will you lock the doors and walk away? Will you hand it over to a successor?
Don’t like the sound of some (or all) of those options? Here’s why they aren’t what’s best for you or your business.
If you own a family business, you may just think your children will take over when you decide to retire or if something happens to you. Perhaps they’ve even worked in the place since they were kids. The problem here? Have you asked them if they want your business? Are they capable of sustaining the business like you do? Do they have the same level of commitment and drive that has helped you grown the business to what it is today? Many, many family businesses fail when they get handed down to the next generation because the drive and passion does not transfer when mom or dad hands over the keys.
If you are thinking about liquidating your business assets and locking the doors come retirement time, you are potentially leaving an enormous amount of money on the table. An operating business is worth more than the value of the assets alone. You also need to consider your employees. If you lock the doors and walk away you will be taking away the income of your staff, income they rely on.
What to do instead? Sell.
One of the best ways you can leave a business is by selling. Selling your business means the business gets to live on and remain a place for your employees to work. It also means you will get a financial return on your investment of time, energy and money. You can then use that return for your retirement or to invest in another venture – like a business your kids actually want.
We know that owning a business is life-encompassing, but you can’t let that stand in the way of planning an exit strategy. Having a plan in place, like reaching a certain age or financial milestone before selling, will greatly improve your chances for getting a big return on the investment you’ve made in your business. Don’t leave it up to the large female singer.
Do you own a business but don’t currently have an exit strategy in place? Would you like to know what businesses like yours have recently sold for? Please feel free to leave any questions or comments here and we would be happy to help.
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