from PART 1…
In my experience, there are typically 3 reasons why an Owner/s is looking to sell:
PayDay is where it all starts. It is after all the most tangible. How much is it worth? How much does the Owner want? How big is the gap? What can be done about it?
And sometimes, it can be where it ends. What is the deal? Terms and conditions? Is this the best we can expect/except? Time to move on…
However, what I’ve come to learn is that Freedom and Legacy definitely play a strong hand in the final outcome. It’s just that no monetary value can be placed on just how instrumental these are.
PART 2 (continues…)
Make no mistake, by going down this path, the Business Owner is starting to warm to the idea of how to Exit with Dignity…How this impacts all people (whether family or not) related to the business must also be taken into account. But ultimately, it is the Business Owners decision and no one else’s…
Whilst price, PayDay, is a primary deciding factor, what only concentrating on this cannot do is assist the Business Owner in determining “when is the right time to sell MY business?”. And all others around will have an opinion on this too.
Other factors outside of the business sale scope may influence this decision in relation to how personally ready the Business Owner is to move on. These are often the tipping point of which no monetary value can be attributed, summarised as “Freedom” to do other things and “Legacy” so the business continues, just not by the current owner.
In other words, how badly does the Business Owner want the:
• PayDay – to set themselves (and family) up financially?
• Freedom – to do other things, the next add-venture perhaps?
• Legacy – for the business to continue (maybe within family), without being at the helm?
To get to the heart of these is paramount, and begins to address Exiting with Dignity.
That said, asking direct questions such as these outright of a Business Owner may not result in the depth of answer required. Instead, there are a number of less targeted ones, which can decipher the clues of readiness. Depending on the depth of relationship of the questioner with the Business Owner will dictate which of these is more appropriate to use.
Are you in a good place? Is the business?
Is the worst behind you? The business?
Who else needs to be included in this conversation?
How much are you prepared to reveal about the true situation of the business? And to whom?
Can you afford to sell?
How are you replacing the cashflow you’re about to sell?
Are you personally well-structured financially?
How much money is enough?
Is the business profitable?
Is the Tax man coming?
What is the asset, that is your Business, worth?
What is this value based on?
Are the business financial statements clean and clear?
Are you excited about something else? The next thing?
Is your luck going to continue?
Do you have Freedom now?
Can the business operate without you?
Do you want to spend more time with family? Do they want to spend more time with you?
What is the longest holiday you have been able to take?
What happened to the business?
Are you prepared to stay on for a period of time post sale? Family members? Key employees? How long?
How will perceived risks be mitigated?
What are your non-negotiables?
Are you becoming less interested in fighting on?
Do you want the business to continue?
Does the business need to continue?
Does the business have family, staff, suppliers and customers to look after?
Will family care?
Will customers care?
Is there a steady flow of new customers? How is this happening?
Do you need to be there?
Is the business sustainable?
Is the business unique or positioned favourably enough to survive?
Lots of stock? Old or new?
Lots of stuff? Old or new?
Or, to summarise, one question to ask to get the conversation started would be “what will you do if you don’t sell?”.
Amidst the aftermath of the pandemic, with some time left to play out, this type of personal reflection is well-timed given how for some Business Owners this prolonged uncertainty may have taken its toll on the individual and the family and those nearest and dearest to the business… If you want to start talk to me, send an email…