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Prepare
Yourself for the Sale
This
seemingly obvious step in preparing a business for sale Is
very often overlooked or given only superficial attention. It
seems that no matter how strong a grasp one has of the
business, given enough time, that very grasp will turn into a
stranglehold. We witness this dynamic occurring in large
public companies all the time--Smith at IBM, Olsen at Digital
for example. Make sure your business is not ready for a change
before you are prepared to make a change as well.
Remember,
in business it is either Grow or Go--there is no such thing as
Status Quo. When a business owner decides to “coast,” in
what direction is the business headed?
Decide
what you will do after time sale of your business
Most
great men and women in history have had more than one career.
Most have enjoyed several careers and, in addition, developed
many diverse non-business interests and hobbies. Perhaps you
want to devote more time developing other business interests.
Maybe you want to change your avocation into your vocation.
You might decide to devote six months, or maybe a year, after
the sale to choose your next course of action.
Invest money outside of your business
If
retirement is your choice, can you afford to retire? Take
advantage of the several retirement plan investment options
allowed under IRS rules. Keogh Plan and Individual Retirement
Accounts (IRAs), Defined Benefit and Defined Contribution Annuities are all examples of financial vehicles, other
then your business, in which you should be investing for
retirement. Few businesses will command the dollars required
to allow for a comfortable retirement from sale proceeds
alone.
Develop outside interests
Owning
a business can be an all consuming experience. “All work and
no play makes Johnny a dull boy.” If your business
represents your identity and, if you “are the business”,
you have two problems:
First,
you probably are unprepared to loose your identity.
Second, your
business will be difficult to sell and probably will not
command a premium price.
Identify
Your Ideal Successor
Your
business is a vehicle. How far and fast you have driven it
will not predict its performance in the future. The future of
your company depends upon whom you allow behind the wheel.
Whether your successor wins the “Indy 500” or, runs your
baby into the ground, depends, in large measure, on how well
you choose.
Choosing
a successor
When
you understand where your business is today you can see what
it could be tomorrow. Finding the right buyer starts with a
review of where your business is and who you are. ldeally,
your successor will have talents and skills that compliment
yours. Also it is imperative your successor appreciate, and be
able to maintain, the strengths of the business you created.
In other words, recognize the strengths and build upon the
opportunity.
Your
buyer should recognize existing problem areas as opportunity.
The right buyer will see that “all the right things are
wrong.” Only the right buyer will pay the “right price.”
Only the right buyer will fully capitalize upon the
opportunity you have created.
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