Business Owners are a special breed! They are independent people who want to be in charge, to make decisions. They love what they are doing – work is fun. Work is satisfying. Their work defines who they are.
As long as things are going well the thought of moving on and selling their business is foreign to them.
But a time will come to sell and move on. As a business owner you need to recognize that your world is going to change. You need to anticipate those changes and be prepared to sell your business. The goal is to ‘go out on top;’ to sell your business on your terms, on your timing.
HERE ARE SOME KEY REASONS TO BE PREPARED TO SELL YOUR BUSINESS:
YOU WILL CHANGE – You won’t have the energy to keep the company viable. You’ll no longer have the passion for the business.
Maybe you, your spouse or other family member will have health problems that will keep you from spending the time you need to run the business.
Or you might run out of ideas, finding that what used to work no longer gets the results you want.
YOUR BUSINESS ENVIRONMENT WILL CHANGE – Global competition, new technology or changing employee values are some factors that will demand new thinking. What got you here no longer works. Your company must reinvent itself to compete in the new world.
Change is essential and you may no longer be the person to lead the needed change.
YOU NEED TO MAKE ROOM FOR THE NEXT GENERATION – Not just family businesses. Any business ‘worth its salt’ needs to have people who have the passion and the ability to lead the business into the changing future.
The future of your business depends upon identifying people with potential, developing them and providing opportunities to grow into leadership roles.
If you fail to provide opportunities for your best people, the very ones you need the most, they will leave perhaps moving to work with your competition.
YOU WANT TO ‘GO OUT ON TOP’ - You have made an investment and built a strong viable business. Now you want to ‘harvest that investment’ by selling it and moving into a new phase of your life. This might happen anytime, independent of your age.
YOU HAVE AN OPPORTUITY TO SELL YOUR BUSINESS - Perhaps, when your business is ‘at the top of its mark,’ a prospective buyer will want to buy it, making an offer the just too good to pass up.
But if you are not prepared to sell and move on, you may pass up a ‘once in a lifetime’ opportunity.
NOTE: Sometimes a buyer will want you to stay on for a short period to assure a smooth transition.
Others may want you to remain indefinitely and continue to manage the business.
The advantage, in either instance, is that you have withdrawn your investment and still have a role. Your challenge is to consider the opportunity carefully to confirm that this arrangement matches your long term personal plans.
In either instance you have only deferred your personal move to independence for a few years.
YOU WANT TO RELOCATE – Perhaps it’s time to move to a warmer climate – one where you don’t have to deal with winter and can play golf or enjoy some other outdoor hobbies year around.
Maybe you want to ‘follow the kids’ who have relocated so you can be near your grandchildren.
YOU HAVE A NEW PASSION – Maybe the business isn’t what you want to do anymore and you want to move on. You want to let go of this business and start a new venture.
Perhaps the business has changed and you are required to do many duties which leaves you with too little time to do what really matters to you; too many management responsibilities and not enough time to work on projects or too little time to see customers, etc.
Selling your business is not a ‘traditional retirement.’ It’s an opportunity for a transition and a new beginning.
The sale is an act of harvesting the investment that you spent years building. It’s moving into a new phase of life – one that gives you new purpose, new meaning and new opportunities.
Making a successful transition is a multi-year process that merges three elements: personal, company and financial.
Even though you don’t want to sell now it’s essential to start planning to assure success.
What are your perspectives on selling a business?
Have you sold a business? Describe the experience. What did you learn that you can pass on to others?
Are you pondering selling? What are your concerns?
Want to explore the subject? Check out my web site http://www.life-work-transitions.com/ or contact me at pkwendel@aol.com or 716 434 8688
Showing posts with label exit strategy. Show all posts
Showing posts with label exit strategy. Show all posts
Tuesday, March 13, 2012
Thursday, February 23, 2012
WHAT'S YOUR EXIT STRATEGY?
Someday you’ll leave your business – every business owner will.
Will you leave on your terms – when you want to or will you be pushed or carried out?
WHAT’S YOUR EXIT STRATEGY?
You have a range of choices.
You can ‘Die at your desk’ – you just keep working until the last ounce of energy leaves your body, and your heirs must pick up the pieces and close out the business.
Or you can just ‘Lock the door and walk away’ selling whatever you have left; plant, equipment and records often for pennies on the dollar. Minimal planning is needed to pull this one off!
THERE ARE TWO OTHER OPTIONS
Both of these oprions can enable you to ‘go out on top’ by selling the business when it has high value so you can harvest your investment and build a nest egg for the next phase of your life.
One transition option is an internal sale; you sell to your partners or management team. This option enables you to build an organization that is your legacy and gives you some input on who will carry your legacy forward. But you must select and develop your successors. And it may take several years for your buyers to complete the buyout.
Another transition option is an external sale to an outside third party. This can often be the most profitable because the buyers see a greater strategic value resulting from merging the two companies. Although finding the best buyer will take more time, completing the sale is usually faster than an internal sale.
The transition option you ultimately choose will depend on your answers to these questions:
• How can you maximize your return when you sell the business?
• Do you have potential buyers on staff; people who have the passion, skills, experience and financial resources to buy you out?
• Can you find external buyers who will pay you a premium?
• What do you want to do in the next phase of your life – after you sell your business?
• What is your time table – when do you want be free to move into your next phase?
HERE’S HOW I CAN HELP YOU.
Remember the old adage: Begin with the end in mind; What outcome do you want? Do you have an exit strategy to achieve that outcome?
My primary focus is helping business owners choose the future they want to create and guide them as the make the transition. It’s not retirement - an end; It’s a transition, beginning a new journey, one that can last decades.
In addition, if you intend an internal transfer, I can help you build the next generation of leaders/owners to carry your legacy forward.
Also, I can augment your team of legal and financial advisors to carry out your owner succession plan.
MY goal is to assist you in laying out your exit strategy well in advance of your needs with plenty of time to implement it in an effective, comprehensive manner.
I look forward to working with you to explore ways to help you lay out your exit strategy.
I invite you to visit my web site at: http://www.life-work-transitions.com/
Pete Wendel
Will you leave on your terms – when you want to or will you be pushed or carried out?
WHAT’S YOUR EXIT STRATEGY?
You have a range of choices.
You can ‘Die at your desk’ – you just keep working until the last ounce of energy leaves your body, and your heirs must pick up the pieces and close out the business.
Or you can just ‘Lock the door and walk away’ selling whatever you have left; plant, equipment and records often for pennies on the dollar. Minimal planning is needed to pull this one off!
THERE ARE TWO OTHER OPTIONS
Both of these oprions can enable you to ‘go out on top’ by selling the business when it has high value so you can harvest your investment and build a nest egg for the next phase of your life.
One transition option is an internal sale; you sell to your partners or management team. This option enables you to build an organization that is your legacy and gives you some input on who will carry your legacy forward. But you must select and develop your successors. And it may take several years for your buyers to complete the buyout.
Another transition option is an external sale to an outside third party. This can often be the most profitable because the buyers see a greater strategic value resulting from merging the two companies. Although finding the best buyer will take more time, completing the sale is usually faster than an internal sale.
The transition option you ultimately choose will depend on your answers to these questions:
• How can you maximize your return when you sell the business?
• Do you have potential buyers on staff; people who have the passion, skills, experience and financial resources to buy you out?
• Can you find external buyers who will pay you a premium?
• What do you want to do in the next phase of your life – after you sell your business?
• What is your time table – when do you want be free to move into your next phase?
HERE’S HOW I CAN HELP YOU.
Remember the old adage: Begin with the end in mind; What outcome do you want? Do you have an exit strategy to achieve that outcome?
My primary focus is helping business owners choose the future they want to create and guide them as the make the transition. It’s not retirement - an end; It’s a transition, beginning a new journey, one that can last decades.
In addition, if you intend an internal transfer, I can help you build the next generation of leaders/owners to carry your legacy forward.
Also, I can augment your team of legal and financial advisors to carry out your owner succession plan.
MY goal is to assist you in laying out your exit strategy well in advance of your needs with plenty of time to implement it in an effective, comprehensive manner.
I look forward to working with you to explore ways to help you lay out your exit strategy.
I invite you to visit my web site at: http://www.life-work-transitions.com/
Pete Wendel
Saturday, August 14, 2010
FIVE WAYS YOUR BUSINESS OWNER'S WORLD IS CHANGING - Why you need to think about it
Do you feel the earth moving under your feet? Every business owner is experiencing change. But each of you responds in the different way. Some anticipate and adjust – experimenting with new approaches and new processes. Others ‘hunker down’ and keep doing what worked, hoping that it will work again.
But the change is often so significant that ‘fine tuning’ what you used to do may not be enough. If you are unable to ‘meet your market,’ your company’s future is in doubt. Here are five ways change is occurring – some external, some internal.
Your Customers’ Buying Patterns are Changing Some are outsourcing, often overseas, products they bought from you. Some are abandoning old products and old production methods and no longer want the items your company used to sell to them. Or their product mix has changed and they aren’t buying as much from you that they used to.
Technology is Changing Your customer wants you to provide a better or different product/service - or produce it faster or cheaper. If you don’t or can’t meet their needs, they’ll find someone who will and you’ll lose that income stream.
Communication Methods are Different Face to face contact is still important to stay in touch with your current customers to understand how their needs and buying patterns are changing. You also need to be ‘out there’ finding prospective new customers and understanding how your markets are changing. In addition, you need to get the word out via the internet and the new social media. In addition to our web site, other electronic media (face book, blogs, newsletters, etc.) are essential to help prospects learn about your company’s unique capabilities.
Your Employees’ Attitudes Are Changing They know what’s going on in the world and in your markets. If they don’t see the company changing with the times, they get scared and start protecting their interests – working slower to make each job last, being unwilling to try new ideas, Or they leave your company to find new opportunities – often with the best people going first!
You Are Changing, Too Maybe you’re ‘running out of steam;’ losing your passion for this work. Maybe your knowledge and experience don’t match the changing world. Maybe you are ‘playing not to lose,’ no longer willing to take risks; not wanting to invest money in new methods, new equipment and training for your people. Maybe you don’t want to ‘get out there’ to meet with your customers and prospects – which brings us back to the first point!
The bottom line is that you need to ‘think bold and act bold.’ What used to work may not be good enough for your company’s survival and future success.
For you, the owner, its essential that you step back from your day to day problem solving and take a long term, big picture look at the new environment your company is operating in. And you may have to set a new direction to succeed in these new times.
Or, maybe, its time to face the fact that you and your company no longer fit in this changed world. If that’s the case, its time to transition into a new phase of your life: one that fits you and matches this different world.
Making that transition, as daunting as it may seem, is better than going down with the sinking ship!
But the change is often so significant that ‘fine tuning’ what you used to do may not be enough. If you are unable to ‘meet your market,’ your company’s future is in doubt. Here are five ways change is occurring – some external, some internal.
Your Customers’ Buying Patterns are Changing Some are outsourcing, often overseas, products they bought from you. Some are abandoning old products and old production methods and no longer want the items your company used to sell to them. Or their product mix has changed and they aren’t buying as much from you that they used to.
Technology is Changing Your customer wants you to provide a better or different product/service - or produce it faster or cheaper. If you don’t or can’t meet their needs, they’ll find someone who will and you’ll lose that income stream.
Communication Methods are Different Face to face contact is still important to stay in touch with your current customers to understand how their needs and buying patterns are changing. You also need to be ‘out there’ finding prospective new customers and understanding how your markets are changing. In addition, you need to get the word out via the internet and the new social media. In addition to our web site, other electronic media (face book, blogs, newsletters, etc.) are essential to help prospects learn about your company’s unique capabilities.
Your Employees’ Attitudes Are Changing They know what’s going on in the world and in your markets. If they don’t see the company changing with the times, they get scared and start protecting their interests – working slower to make each job last, being unwilling to try new ideas, Or they leave your company to find new opportunities – often with the best people going first!
You Are Changing, Too Maybe you’re ‘running out of steam;’ losing your passion for this work. Maybe your knowledge and experience don’t match the changing world. Maybe you are ‘playing not to lose,’ no longer willing to take risks; not wanting to invest money in new methods, new equipment and training for your people. Maybe you don’t want to ‘get out there’ to meet with your customers and prospects – which brings us back to the first point!
The bottom line is that you need to ‘think bold and act bold.’ What used to work may not be good enough for your company’s survival and future success.
For you, the owner, its essential that you step back from your day to day problem solving and take a long term, big picture look at the new environment your company is operating in. And you may have to set a new direction to succeed in these new times.
Or, maybe, its time to face the fact that you and your company no longer fit in this changed world. If that’s the case, its time to transition into a new phase of your life: one that fits you and matches this different world.
Making that transition, as daunting as it may seem, is better than going down with the sinking ship!
Friday, April 16, 2010
THREE RETIREMENT STRATEGIES
In my work with business owners, I encounter three strategies for dealing with ‘work-life transitions’ – often called retirement.
The first strategy is to ignore the problem and just keep on working – even after they have lost their ‘edge,’ their passion and their energy. They don’t have an alternate lifestyle to move into so they just keep doing the only thing they know. They stay too long and suck the life out of their business, significantly reducing the value of their equity in the process.
Then, one day, they’ve ‘had it.’ Without much prior planning, they quit – maybe because of poor health or because the business is failing and is no longer sustainable or they just ‘burnout.’ They have no idea what they will do next or what will happen with their business. They sell the business when they have to, instead of when the want to, maybe for ‘pennies on the dollar.’ And the life they are left with is empty, sterile, and directionless. They struggle between meaningless activity and boredom.
There is a second, special kind of people who successfully keep on working: artists, writers, some attorneys and others who work independently, without an organization to support them. Their value is their personal work, not the organization they lead. ‘Living their passion,’ they do it as long as they can, often into their 80s and 90s. For example, Peter Drucker, the prolific management writer (over 30 books) and consultant remained active, albeit in a somewhat diminished role until he died at age 95 in 2005. For him, his work and his passion were one in the same – to work is to live.
The third group follows a different strategy. They plan ahead, thinking ‘transition’ long before the time when they will leave the business. Even while still actively working, they regularly step back from the day to day operation of their business and begin to plan for the next phase of their life. Ultimately, they leave on their own terms.
This third strategy could involve starting a new business, take a new role in their original company or working somewhere else. Or they might work with a cause for which they have a great passion. This life of service gives them great pleasure and satisfaction -– giving them ‘psychic income’ while providing a much needed service. And they have time for personal/family pursuits.
There are several of keys to planning a successful departure from the business:
All this takes time – often several years. So it’s important to start early. Waiting too long can severely limit a person’s options both for himself and for the business.
The moral? Start thinking about the next phase of your life and regularly block out time to make choices about how you will create a meaningful, fulfilling life after your work/life transition.
What is your life strategy? What thought have you given to your future? What will be the next phase of your life – after you transition out of your business? What are you planning for the future of your company after you move on? When is that last time you took time to give this serious consideration? What are you going to take some more time to do it again?
I work with business owners who are contemplating retirement. I can help you. Contact me to explore your options and develop a plan for your future. Call me by April 30 and our first conversation is complimentary.
The first strategy is to ignore the problem and just keep on working – even after they have lost their ‘edge,’ their passion and their energy. They don’t have an alternate lifestyle to move into so they just keep doing the only thing they know. They stay too long and suck the life out of their business, significantly reducing the value of their equity in the process.
Then, one day, they’ve ‘had it.’ Without much prior planning, they quit – maybe because of poor health or because the business is failing and is no longer sustainable or they just ‘burnout.’ They have no idea what they will do next or what will happen with their business. They sell the business when they have to, instead of when the want to, maybe for ‘pennies on the dollar.’ And the life they are left with is empty, sterile, and directionless. They struggle between meaningless activity and boredom.
There is a second, special kind of people who successfully keep on working: artists, writers, some attorneys and others who work independently, without an organization to support them. Their value is their personal work, not the organization they lead. ‘Living their passion,’ they do it as long as they can, often into their 80s and 90s. For example, Peter Drucker, the prolific management writer (over 30 books) and consultant remained active, albeit in a somewhat diminished role until he died at age 95 in 2005. For him, his work and his passion were one in the same – to work is to live.
The third group follows a different strategy. They plan ahead, thinking ‘transition’ long before the time when they will leave the business. Even while still actively working, they regularly step back from the day to day operation of their business and begin to plan for the next phase of their life. Ultimately, they leave on their own terms.
This third strategy could involve starting a new business, take a new role in their original company or working somewhere else. Or they might work with a cause for which they have a great passion. This life of service gives them great pleasure and satisfaction -– giving them ‘psychic income’ while providing a much needed service. And they have time for personal/family pursuits.
There are several of keys to planning a successful departure from the business:
- Choosing the ‘next phase’ of their life,
- Building a sustainable, saleable business,
- Deciding whether to sell internally, to partners, associates and/or family members, or externally to an outside buyer,
- Fully withdrawing their investment before giving up control.
All this takes time – often several years. So it’s important to start early. Waiting too long can severely limit a person’s options both for himself and for the business.
The moral? Start thinking about the next phase of your life and regularly block out time to make choices about how you will create a meaningful, fulfilling life after your work/life transition.
What is your life strategy? What thought have you given to your future? What will be the next phase of your life – after you transition out of your business? What are you planning for the future of your company after you move on? When is that last time you took time to give this serious consideration? What are you going to take some more time to do it again?
I work with business owners who are contemplating retirement. I can help you. Contact me to explore your options and develop a plan for your future. Call me by April 30 and our first conversation is complimentary.
Tuesday, January 26, 2010
BRETT FAVRE AND YOU - WHAT'S NEXT?
Thoughts about Planning your Exit Strategy
A few years ago, Brett Favre retired as the long time quarterback for the Green Bay Packers NFL football team. Apparently he wasn’t ‘prepared’ for retirement because a few months later he signed with the New York Jets. This season he joined the Minnesota Vikings and led them to the conference championship game.
When Favre went through his “I’m retired, I’m not retired” turnaround, I wrote about it, drawing an analogy between him and lots of business owners contemplating retirement. Now, at forty – he’s the oldest quarterback in football - he will soon face the same situation once again. It’s only a matter of time before he retires, voluntarily or otherwise.
You, a business owner, will someday be facing the same challenge. You’ll be asking similar questions like “How will I retire?” “When is the right time?” What will I do with the rest of my life?” And others like “What do I do with my business?” “How do I get my money out?”
Unlike Farve, whose focus is primarily personal, yours must be in three areas: Financial, Business and Personal.
One presumes that Favre is set financially. With the help of your financial and legal advisors, you are addressing this. (You are, aren’t you!?)
From a business standpoint, the management of the football team has planned for the team’s continuity. Indentifying and developing their next quarterback, along with players for other positions, is one of their responsibilities. Continuity of the team is not part of Favre’s MO.
Business continuity is a challenge you and every business owner must address to assure that you can withdraw your investment from your business to your personal investment portfolio. Whether you sell internally, to your partners, family and/or staff, or externally, to outside buyers, you need to develop an exit strategy. That strategy will determine your transition plans. To successfully implement your plans it’s important to start early. It’s a long term process.
Probably the biggest challenge, whether to Favre or to you, is the personal side. Favre is ‘only forty,’ probably with more than half his life ahead of him. But he may have no choice about when he retires – the team management may make that decision for him.
You can expect a life after ‘retirement’ of twenty years – maybe more. You have control over your timing. It’s your business. But if you hold on too long you may see your business – what you worked so hard to build – wither away, diluting your investment as it goes.
In both instances, Favre and you, the key is to rethink ‘retirement.’ It’s not the end. It’s a ‘transition’ from one life style to another. I hope that Favre, after his retirement dilemma of a few years ago, spent some productive time building his ‘new life after football’ so that he has something to move into, to look forward to. I call this “Building a boat to step into when you walk of the dock.”
What about you? It’s important to start early making personal and business decisions that weave together financial, business and personal factors to create a transition that assures a meaningful, fulfilling life, provides adequate income to live it and, if you want it, leaves a successful, ongoing business as your legacy.
It’s never too early to start planning your transition. How about today?
A few years ago, Brett Favre retired as the long time quarterback for the Green Bay Packers NFL football team. Apparently he wasn’t ‘prepared’ for retirement because a few months later he signed with the New York Jets. This season he joined the Minnesota Vikings and led them to the conference championship game.
When Favre went through his “I’m retired, I’m not retired” turnaround, I wrote about it, drawing an analogy between him and lots of business owners contemplating retirement. Now, at forty – he’s the oldest quarterback in football - he will soon face the same situation once again. It’s only a matter of time before he retires, voluntarily or otherwise.
You, a business owner, will someday be facing the same challenge. You’ll be asking similar questions like “How will I retire?” “When is the right time?” What will I do with the rest of my life?” And others like “What do I do with my business?” “How do I get my money out?”
Unlike Farve, whose focus is primarily personal, yours must be in three areas: Financial, Business and Personal.
One presumes that Favre is set financially. With the help of your financial and legal advisors, you are addressing this. (You are, aren’t you!?)
From a business standpoint, the management of the football team has planned for the team’s continuity. Indentifying and developing their next quarterback, along with players for other positions, is one of their responsibilities. Continuity of the team is not part of Favre’s MO.
Business continuity is a challenge you and every business owner must address to assure that you can withdraw your investment from your business to your personal investment portfolio. Whether you sell internally, to your partners, family and/or staff, or externally, to outside buyers, you need to develop an exit strategy. That strategy will determine your transition plans. To successfully implement your plans it’s important to start early. It’s a long term process.
Probably the biggest challenge, whether to Favre or to you, is the personal side. Favre is ‘only forty,’ probably with more than half his life ahead of him. But he may have no choice about when he retires – the team management may make that decision for him.
You can expect a life after ‘retirement’ of twenty years – maybe more. You have control over your timing. It’s your business. But if you hold on too long you may see your business – what you worked so hard to build – wither away, diluting your investment as it goes.
In both instances, Favre and you, the key is to rethink ‘retirement.’ It’s not the end. It’s a ‘transition’ from one life style to another. I hope that Favre, after his retirement dilemma of a few years ago, spent some productive time building his ‘new life after football’ so that he has something to move into, to look forward to. I call this “Building a boat to step into when you walk of the dock.”
What about you? It’s important to start early making personal and business decisions that weave together financial, business and personal factors to create a transition that assures a meaningful, fulfilling life, provides adequate income to live it and, if you want it, leaves a successful, ongoing business as your legacy.
It’s never too early to start planning your transition. How about today?
Thursday, November 5, 2009
EVALUATING YOUR POTENTIAL SUCCESSORS
A key factor in planning for your retirement (what I call your transition) is being confident that the people who will succeed you have the 'timber' (aka the ability, passion, knowledge etc.) to lead your company into the future.
Choosing and developing them is one of your challenges. It's an obligation you have to your partners, shareholders and other staff members.
If you fail, all the rest of your work in building a sustainable organization will have been wasted. You will have failed in leaving your legacy.
Many leaders and owners pick their potential successors based on erroneous assumptions about 'What it takes' to be a leader. They incorrectly assume that loyalty, longevity, good technical competence, being a family member, etc. are the best criteria to use.
That's what it takes to be a good 'Number two' - a good 'doer.' That MAY qualify then to be good managers - this is not what it takes to be a leader. There are relativly few people who can lead.
What's the difference between a good manager and a good leader? A recent article in the Wall Street Journal is a good reference.
You may have lots of good managers in your company. And you'll be lucky - or brilliant - if you have surrounded youself with several people who have leadership potential - the qualifications to lead the company after you step aside.
THE BOTTOM LINE; take a long, hard look at the people around you.
Identify those who have leadership potential and focus on grooming them. If you don't have what you need, start searching - outside your company NOW. And stop wasting your time trying to make your good managers into mediocre leaders!
Choosing and developing them is one of your challenges. It's an obligation you have to your partners, shareholders and other staff members.
If you fail, all the rest of your work in building a sustainable organization will have been wasted. You will have failed in leaving your legacy.
Many leaders and owners pick their potential successors based on erroneous assumptions about 'What it takes' to be a leader. They incorrectly assume that loyalty, longevity, good technical competence, being a family member, etc. are the best criteria to use.
That's what it takes to be a good 'Number two' - a good 'doer.' That MAY qualify then to be good managers - this is not what it takes to be a leader. There are relativly few people who can lead.
What's the difference between a good manager and a good leader? A recent article in the Wall Street Journal is a good reference.
You may have lots of good managers in your company. And you'll be lucky - or brilliant - if you have surrounded youself with several people who have leadership potential - the qualifications to lead the company after you step aside.
THE BOTTOM LINE; take a long, hard look at the people around you.
Identify those who have leadership potential and focus on grooming them. If you don't have what you need, start searching - outside your company NOW. And stop wasting your time trying to make your good managers into mediocre leaders!
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