The main reason that some people take opportunities when they arise, and others do not, is that some people are ready.
They have their business plan ready and all they need to do is take advantage of the opportunities.
Where can you find the right business plan?
If your business is based in the United States - click here
If your business is based in the U.K. - click here
Ideas To Action.
Part 66 - Selling Your Business.
Selling a small business is a complex venture that involves several considerations. It can require that you enlist a broker, accountant and an attorney as you proceed. Whether you profit will depend on the reason for the sale, the timing of the sale, the strength of the business's operation and its structure. The business sale will also require much of your time and, once the business is sold, you will need to determine some smart ways to handle the profit.
Reasons for the Sale
You have decided to sell your business.
That is the first question a potential buyer will ask. Business owners commonly sell their businesses for any of the following reasons:
- Partnership disputes
- Illness and death
- Becoming overworked
Some business owners consider selling the business when it is not profitable, but this can make it harder to attract buyers. Consider the business's ability to sell, its readiness and your timing. There are many attributes that can make your business appear more attractive, including:
- Increasing profits
- Consistent income figures
- A strong customer base
- A major contract that spans several years
Selling Your Business
The steps involved in determining how to ultimately leave the business you have built require careful thought, deliberate consideration, and plenty of time. There are many directions you can take in the sale of a company, and considering who you will eventually find at the other side of the negotiation table is one of the most important things to understand as you get started down the path to an exit.
There are a narrow band of buyers you will likely encounter as you market a business for sale. As each have differing priorities and represent unique outcomes for the business, educating yourself on each buyer type is one of the first steps in beginning to plan the sale of your company.
- Strategic buyers - One of the most likely buyers of a company is another business. The businesses that pursue growth through acquisition are often referred to as “strategic buyers.” This name is bestowed because the companies look for acquisition targets that are aligned with their core strategy, rather than other characteristics of a company, such as financial metrics. One advantage of selling to a strategic buyer is that your business might command a higher sale price. Strategics will often pay a premium for the synergies that make your business a natural fit alongside their own.
- Private equity - Private equity firms are investment vehicles for institutional investors or high net-worth individuals. Limited partners (“LPs”) invest their money into funds that general partners (“GPs”) of the PE firm use to buy companies, typically within a specific industry. PE executives seek to maximize the growth of the portfolio companies over five to seven years before selling them and earning a return for themselves and their investors.
- Family office - Family offices resemble private equity firms in some respects, but they differ in important ways. Rather than acting as investment vehicles for groups of high net-worth individuals and institutional investors, family offices invest the money of a single wealthy family, typically with a focus on the industry that netted that family its fortune. Family offices’ primary objective is ensuring that familial wealth spans multiple generations.
- Holding company - Holding companies (also known as shell companies) exist primarily for the sole purpose of owning other companies. Typically they do not sell any products or services of their own. Instead, they generate revenue from the dividends and earnings of the stock they own in other businesses. Keep in mind also that, while holding companies owned by others might make good buyers, there can be tax benefits in certain instances to forming your own holding company as part of your sale process.
- Search fund - If the idea of managing a sale primarily through an individual is appealing, then exploring search funds can be a great option. Search funds consist typically of an individual, backed by a team of investors, looking to buy a business and take over the operations.
- Your employees - Selling to new parties - such as the above options - can welcome some measure of change on the direction and / or operations of your business once ownership is transferred. If you are looking for an exit opportunity that allows your company to maintain its current course in your absence, look no further than your employees. An employee-stock ownership plan (ESOP) will gradually transfer the company’s equity into retirement packages for your employees, while a leveraged ESOP provides the employees with debt to buy the owner out of a portion, if not all, of their equity up front.
A Great Business did not just happen - It was planned that way.