How to sell your business while protecting your legacy
Protecting your legacy can be hard. Some small-business owners may plan to pass their company on to a family member, while others may have little choice but to liquidate a failing enterprise.
A bigger proportion, however, will sell their business on the open market. Deciding when to do so is a major decision with many factors to consider, with many owners concerned about the fortunes of their business after they sell their legacy, in other words.
Stick or twist
In many ways timing a sale is a game of stick or twist. Your business might fetch 100, 000 now, but what if it’s worth double that in five years? time?
But there’s no guarantee your business will grow in value. Indeed, your fortunes could reverse be it through falling demand, rising supplier costs or an economic crash and it could actually shed value in the years ahead.
Young, possibly child-free and often with little to lose in terms of assets, start-up entrepreneurs are famously liable to take risks, as they must be to establish a new business in the first place.
As the years pass, however, they often become more conservative and risk-averse. If theyve established solid revenues, a valuable asset and a team of employees who depend on them for their livelihood, not to mention perhaps having children and being closer to retirement, they might feel they can no longer afford to make bad decisions.
If this chimes with your situation, then you might decide that the business needs an injection of fresh ideas and bold decisions to take it to the next level, or even to survive in the long term amid changes in technology and consumer habits. Perhaps only a new, hungrier owner can make this happen.
Time for a change
A successful business can take many years and considerable effort to build. it’s hardly surprising then that many entrepreneurs eventually feel burnt out by the experience and yearn for a different challenge or simply a rest.
So whether your inclination is to retire and spend more time with your family, or to fund a new venture, it’s wise to exit the business if you feel your energy, passion and motivation have waned.
Sell on your terms
Plan your exit strategy in advance and you can sell the business on your terms and at a time of your choosing. And yet for all the benefits of doing so, owners of closely-held businesses rarely have a succession plan in place, said Clinton Lee from UK Business Brokers.
progeny are often uninterested in pursuing the family business or they lack the requisite skills, he continues. But founders/owners are often tempted to fit the proverbial square peg into a round hole as they feel unable to trust a stranger to run their business.
the owners’ only other alternative to unsuitable family members taking over is the even less attractive option of liquidation.
Is there no other alternative for protecting your legacy? Yes, says the broker.
Jo joined Dynamis in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.