There are so many reasons you might want to step back from your company – and there are plenty of options, too. The obvious exit strategy is to sell the business through a business broker or similar. But that’s far from your only choice. You might like to consider other possibilities.
This is the second in my series of options for stepping back from your business, following on from #1: Passing your business to the next generation, which you can also find in my succession planning blog.
#2: Transitioning your business to a staff member
Do you have a senior member of staff who is keen to take over your business? This can be a fantastic way to sell to someone who really understands the industry, the customers and your aims for the growth of the business. Done right, it can be a relatively straightforward sale with a smooth transition. It can also ease you out of the business gradually.
When I’ve worked on these transitions in the past, I’ve helped put together all the paperwork for an independent valuation of the business. The employee will rarely have the money to match the price immediately, but usually we’re able to work on a profit payout system over several months or years, buying the business on a kind of payment plan.
You may not get absolutely top dollar when you sell to a staff member (or to the next generation, for that matter) but you’re less likely to see the business quickly run into the ground or sold off. The brand you built may remain strong, or grow even stronger – and you may still retain an interest in the company if that works for both parties.
However you want to transition your business, it starts with planning and good advice. Give me a call if you want to talk.