You have spent the last 20+ years nurturing and growing your distribution business. Your employees, customers and suppliers are your extended family. You have hurdled many obstacles and have managed to keep up with the technological evolution to this point. However, the rate of change is overwhelming. To keep up, you must decide whether to invest your hard-earned capital in growth or cash out of the business through a sale. The truth is that all business owners will transition eventually. Therefore, all owners, including you, should plan with the end in mind.
Ultimately, it is not a subject that you are comfortable with. There are so many things to consider…transition to family, sell to management team, sell to a strategic buyer, private equity, minority interest, ESOP and on and on. So many risks…will it be a drawn-out process, will rumors destroy the company’s goodwill and then you worry that your chosen successor won’t be as capable or passionate about the business as you had hoped.
You should begin now to strategically plan for the transition of your business. It is important to understand what the value of your business is today. You should know how that valuation amount fits into your overall personal financial plan.
You also need to be ready, just in case, opportunity knocks and you receive an offer from a prospective buyer, or something unexpected happens to you such as an illness or accident. Are your books and records in order? Do you have a management team in place? Do you have written agreements with customers and suppliers? Can you prove the value of your business during the due diligence process?
Now would be a good time to assemble your strategic team to advise and support you. The team will assist you in minimizing risk and to optimize your financial success of a transition.
I would love to share with you my firm’s guide for business transitions, The Exit Strategy Handbook © authored by Jerry L. Mills, B2B CFO®. It will provide direction on assembling your advisory team and includes answers to many questions you are sure to have.
Please schedule a brief introduction call with me and I will provide you a complimentary copy of the book. (Click here to schedule introduction call)