For many business owners, day-to-day responsibilities can very atypical. On some days, they have marketing issues to concentrate on while other days purchasing decisions might be their main focus.
For most owners, there are many days were all of these issues, and more, can occur simultaneously. For these reasons alone, it is easy to understand why some business owners do not take the time to map out an exit strategy.
Coupled with the reality that many people’s lives are very busy, whether you own a business or not, one can appreciate some of the challenges that a business owner face when contemplating such a step.
A good starting point for a seller is identifying the types of business sales that occur. By doing this, owners can begin to formulate business strategies that will make their company attractive to potential buyers.
Some of the more common sales transactions are as follows:
Other owners wish to leave their business to their children or other family members. This can be attractive when practical, but also potentially disruptive. It’s one thing to pass a company over to a non-family member; it’s another when you have to choose one family member over another.
This is similar to an acquisition, however, the assets of the two merging companies for a new entity. In this case, there might be some requirements for the sellers to stay involved in the business for a predetermined amount of time.
Contrary to popular belief, almost all types of businesses can be sold. An owner doesn’t just need to have a large manufacturing or retail business to be able to sell it.
We have been involved in the sale of a number of professional companies, big and small, such as marketing companies and contracting businesses, where a built0in customer base and infrastructure was very attractive to buyers.
However, when feasible, it can be very rewarding. Sellers need to remember not to fall into the trap of focusing all their efforts on a single group of prospects, no matt how attractive it might seem. If the buyer knows they are the sole interested party, they can control the negotiations.