A business exit plan isn’t something you develop overnight. Positioning your sale to make top dollar in the marketplace takes years of preparation before you ever sign on the dotted line in the actual transaction. You’ll want to employ a dedicated team that will take the time and effort to maximize your gains leading up to the sale.
You’ll want to strategically plan your exit. Let me explain. Recently, while speaking with a prospective client, he told me of his intention to sell his business. He said, “I have an interested buyer, and I think I can negotiate this particular deal myself. It will net me more money than hiring a team to the do the negotiations.” So I began to go through all the scenarios he may encounter. I asked some very basic questions. As our conversation progressed, he quickly realized he was outgunned and didn’t know what he was talking about.
I wasn’t trying to discourage him from selling, nor was trying to throw him under the bus. I merely wanted him to realize how important the sale was. Getting a team together to make sure there were no mistakes was the best and most efficient way to guarantee he would end up with a desirable return on his investment. Here’s who I told him to employ.
Obviously, you start with the quarterback or the master planner. They act as a team leader. It could be anyone of the following: an attorney, a CPA (Certified Public Accountant), or a CFP (Certified Financial Planner). Whoever you choose to be at the helm will also carry CEPA (Certified Exit Planning Advisor) designation. This commission means The person holding it has done over a hundred hours’ worth of work. The education they must undergo is very similar to an MBA program. The Exit Planning Institute only issues the tittle. Their purpose is to help and show business owners how to maximize their business’s value, conduct personal financial planning and then develop a life after business. So, a CEPA would be an excellent person to place in the all important quarterbacking role.
Along with that, some of the other major players involved in the sale may or may not include any of the following:
The list goes on. It’s not surprising even some of the smallest businesses
Being transferred to end up having 10, 15 and 20 different professionals involved when it comes to the planning and selling of that business.
So, an exit plan is so much more than, “Hey, I have a buyer” like my prospective client said. The better way to phrase it is, “ Hey, I think have a buyer, help me plan this for maximum benefit.”
At the point when you have a buyer and are ready to exit, then it’s too late to maximize profitability if you haven’t done the proper planning. Typically in that scenario, you just aren’t going to get the highest bid for your company. That is what this gentleman quickly found out. His business was not worth what he thought. An offer came in and it was depressing to this individual who thought he knew what he was doing when it came to exiting. So now, he will have to spend three to five years getting the business positioned to net the maximum value.