Business Owners’ Special Series #3
Over 75% of business owners who have sold their business experience profound regret within a year after the sale, according to an Exit Planning Institute report. If you want to avoid becoming a member of this forlorn fraternity, read on as we take a look at how this happens and what can be done to prevent it.
Don’t Wait Too Long to Plan Your Exit
Preparing for the sale of your business is not something you do right before you sell. It is something you should do every day. Spending your days working on the business instead of in the business will increase the success of the business overall and leave it more prepared for a transition when you are ready to sell.
Have a Realistic Idea of the Business’s Value
Your perspective of your company’s value, as the current owner, is irrelevant. You need to know how a potential buyer sees its value, and focus on building it up from their perspective. When you have a realistic idea of the value of your business, you’ll be in a stronger position to negotiate a sale and will likely end up with a deal that meets or exceeds your expectations.
Make Sure the Sale Price Offered Meets Your Retirement Needs
If you are relying on the proceeds of a sale to fund your retirement, you need to do some planning. Do not put it off because you think retirement is far away. Start planning now, and it will be easier to close the gap between what you will receive from a sale and what you need to meet your retirement goals. Waiting makes it far more difficult, if not impossible.
Plan Your Post-Sale Future
Starting, building and growing your business likely has consumed almost all of your mental energy for many years. How will you fill that void after selling your business? Many owners don’t plan ahead for life after the sale and find themselves regretting giving it up. If you start planning on how to you will be filling up your free time, it will help make the transition from powerful business owner to relaxed retiree much easier.
There are many more reasons why a business owner may feel regret after a sale, but there are too many to list them all here. Post-sale regret, however, is not a foregone conclusion because there is an alternative. If you want the sale of your business to be the pinnacle of your life as a business owner, then beginning to prepare now is necessary. Certified Exit Planning Advisors (CEPAs) can help. CEPAs take a long-term view and plan for the best outcome from both the financial and emotional perspective, to avoid post-sale regret. They also help prepare for life after sale, so you avoid becoming members of the ‘Sad 75 Club.’ They plan for a successful transition from business owner to a proud member of the ‘Thriving 25 Club’ – aka business owners who have properly prepared for sale, executed a successful sale transaction and have effectively planned for a fulfilling life after selling your business.
Rich Gunn leads BPM’s Value Acceleration Service Team, which helps with succession, transition and exit planning for business owners. Rich is a Certified Exit Planning Advisor and a member of the Exit Planning Institute.
The Business Owners’ Special Series (BOSS):
The Business Owners’ Special Series (B.O.S.S.) is made up of several informational articles for business owners who are proactively seeking guidance from experts on how to implement value acceleration in their business. Be sure to keep reading, if you desire to develop your business to its maximum potential value and gain an understanding of how and why beginning the process sooner results in building greater value.