Will You Have a Successful Business Exit?

Beating the Odds for a Successful Exit

Businesses are investments. You must plan to create grow and ultimately capture the total value of this investment.

This requires a successful business exit, which must be prepared every day - from now.

Circle graphs of steep odds of seling business. 70-80% rejected outright from brkoers and M&A advisors. 20-30% proceed to sell. only 5-10% end up selling wth only half of those selling going for a premium

The Financial and Mental Challenges to Exit

Over 75% of business owners regret the exit after one year, and only 5% are happy with the deal’s proceeds.

Getting your Business to sell one day is not the only challenge.

Financial and Mental Readiness to exit is just as critical.

Am I able and prepared to exit?

Do I want to leave the company behind, or do I prefer to remain involved in some capacity?

How will I fund the life I want after an exit?

How will the well-being of my employees, family, etc. be addressed in the exit?

Selling your Portfolio Versus Selling your Business

When diversifying your investment portfolio, it is primarily a financial decision. The decision on which percentage to hold as stocks or which specific equities to buy is based mainly on price and return on investment.  Selling a block of securities will not take an emotional toll (unless, of course, it was a significant loss).

However, selling your business is much more complicated and personal. To sell without regrets, you must be both mentally and financially prepared for this major life change.

In fact, financial considerations are only one of four considerations you need to plan and address.

Business Structure and Preparedness

Financial Considerations

This can take years to prepare.

Is the company attractive to a potential buyer?

Where does it stand on the 8 drivers of Business Value?

Will you have the freedom to select amongst different options or face an imposed exit??

Can you afford to exit the business.

What kind of terms, if any, will you be able to select?

Will there be an extended “earnout” period?

Will you have to fund part of the exit yourself or take risks to make the deal happen?

When can I exit my Business and retire

At what price will I need to sell my Business to fund the remainder of my lifestyle

Professional Considerations

Personal Considerations

Most likely, you have an investment as well as a job in the company you own. Often the company is a significant part of your identity. . 

What will you want to do after the exit? Full retirement or to still be involved in the Business as a passive investor or even an employee?

How long will you want to continue working?

Are you comfortable reporting to new owners after years of being your own boss?

What do you plan to do professionally in general after exit? Retirement, new Business, work elsewhere?

If you spent a significant part of your life creating and growing a business, you might suffer a deep sense of loss upon exit – almost as if you lost a child.

How will the exit affect you, your family and the employees left behind?

How will an exit affect your lifestyle? Will you have to find a new job or continue working?

Will you be able to retire and enjoy it?

How will you feel when the company is no longer part of my life or identity

Why are you selling? Are you being “forced” (burnt out, health, etc.) or “volunteering” (new opportunity, retirement, etc.)?

Being forced tends to lead to lower the selling price

In short, private business exits are difficult because they are so complicated and not just a matter of price and money, as many business owners erroneously believe.

They are intensely personal decisions

Are you ready?

hand reaching over to shake a hand signing a contract

1. Is your Business prepared to sell by being attractive enough to get the price you need to capture its total value?

2. Are you mentally ready for all the consequences post exit of not having the Business as part of your life?

3. After the Business Exit, will you have enough money and assets to lead the life you want?

A successful exit requires a Yes to the three questions above:

If you would like to see where you stand on these three questions, please feel free to take the free surveys below.

Business Readiness

Measure the Value and Independence of your Business
Compare you business with how over 60,000 other companies have scored on 8 key drivers of Business Value

Mental Readiness

Are you Mentally Ready to Exit?
75% of owners regret the sale of their companies. Do not understimate the mental aspects of exiting your Business. Can you do so without regrets?

Financial Freedom Point

What is your Financial Freedom Point?
Could you financially afford to retire today? Where do you need to grow your company to be able to retire with the lifestyle you want?