Exit Your Business on Your Terms

April 5, 2010 by

What can exiting from your business mean to you?  It can be as emotionally difficult as a bankruptcy or forced liquidation or it can be a planned sale with all debts paid, money for retirement and peace of mind. Planning for succession means you should plan to sell when the sale will provide the funds necessary to retire or move on to a new opportunity. It can also be passed on to your heirs, employees or partners with proper pre-planning to fund the sale.

Ralph Berge is a Cleveland Business Coach who helps business owners with succession management.  Succession management is an exit strategy that simply means you have planned your transition and you are ready to take advantage of the options available to you. Call Ralph Berge, Business Coach 440-838-0991 to get moving on your business exit strategy.

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Exit Your Business on Your Terms…

January 11, 2010 by

What can exiting from your business mean to you?  It can be as emotionally difficult as a bankruptcy or forced liquidation or it can be a planned sale with all debts paid, money for retirement and peace of mind. Planning for succession means you should plan to sell when the sale will provide the funds necessary to retire or move on to a new opportunity. It can also be passed on to your heirs, employees or partners with proper pre-planning to fund the sale. 

Ralph Berge is a Cleveland Business Coach who helps business owners with succession management.  Succession management is an exit strategy that simply means you have planned your transition and you are ready to take advantage of the options available to you. Call Ralph Berge, Business Coach 440-838-0991 to get moving on your business exit strategy.

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You Built It….Now What Do You Do With It?

November 16, 2009 by

Many small business owners have the goal of handing the business over to a family member when they reach a certain age. That’s fine, but will that person be able to run the business then? Does he or she need particular qualifications? Will he or she need special training before they can take over? All this has to be thought through years in advance. It’s time for the business owner to be making a plan for succession management.

Other considerations will be based on your own importance to the business. If it literally can’t get along without you because of your expertise or some other factor, what happens if you’re forced to exit by illness or accident? Your plans for the value of the business when you leave it could be totally negated unless you’ve planned for such a contingency.

If your intention is to sell the company at a certain point in time your strategy will be to enhance the value of the business between now and that date by increasing the worth of its assets. How you do that depends on many factors, but for some firms it’s going to require a sustained drive for a larger customer base and/or an expanded range of products. For others it can mean an emphasis on research and development to develop and patent new products or processes.

To get the best possible price when selling the business it’s essential to maintain accurate and verifiable records from day one. Most buyers looking to purchase a business generally want to see at least three years of financial information.

 

 If you haven’t considered these questions, you likely don’t have a plan for succession in your business. This lack of planning for succession is putting you, your company and family at risk. Find time to at least consider the full potential of that risk.

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Begin With the End in Mind

August 24, 2009 by

Stephen Covey taught us to begin with the end mind when deciding want steps to take in our decision making process. It is even more important when building your business.

Often the day to day events can consume even the busy business owner. Planning for succession unfortunately takes a back-seat.

 As a result, the end in mind strategy is lost and exit planning strategy is often postponed. Business owners inherently believe there is plenty of time later  to ”think-up” an exit strategy.

 The problem is that without a formal exit plan, wrong decisions can be made that reduce your company’s value or eliminate viable exit strategy options.

 Today, many business owners are building companies to sell. They focus on factors that enhance the exit process. The best advice is to ensure you have a balance between the present and the future. What is your vision for the business, and when will you know you are done? How will you leave the business on your terms? And how will your family and you benefit from your hard work and risk?

 Many options exist. Are you considering leaving the business to family members, going public, selling it to employees, or to a private equity group or strategic corporate acquirer?

In the beginning a natural tendency is to have a very short time horizon – next payroll, next tax payment, next customer, and next month. But to realize a successful (and earlier) exit, the business owner needs to keep his or her eye on the ultimate sale of the company. More important creating and implementing an exit plan builds value in the organization.  

Begin with the end in mind. Talk with Ohio business coach and Certified Exit Planning Advisor, Ralph Berge. Call him 440.838.0991.

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Let’s Look at a Few Options for Your Business…

August 10, 2009 by

Wait for a buyer…

According to Deloitte’s Entrepreneurship UK: 2008 survey: 35 percent of business owners said they will wait for a third-party offer for their businesses. Owners in this group believe that one day a buyer will contact them, negotiate a sale, and that will be that. Well, this is a decision of sorts—but one that flies in the face of reality. While few businesses are being sold today, there will likely be a significant number of Baby Boomer business owners vying with you to sell their businesses when the M&A market recovers.

In a competitive buyer’s market, only the best-prepared businesses sell for top dollar. And the owners of those well-prepared businesses will be those who made the decision to act to prepare their company years ahead of the actual sale. 

Liquidate…

Liquidation is a common exit path for owners of companies whose cash flow is flat and has little probability of improving—absent the design and execution of a business/exit plan. If you find yourself in this group, we recommend that you meet with your tax and other advisors to do the planning necessary to create the most tax-efficient liquidation possible. 

Succession Management/ Exit Planning…

Planning for succession and your exit from your business is not an event, but a process that should begin years in advance of your anticipated departure. The first step of the process is to develop a vision for you, your family and the team who will manage and perhaps own your company. Then establish goals (aligned with your vision) or a pathway that leads you toward your vision. This is clearly the best and most profitable road to your future.

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Why Decide Today to Leave My Business in Five Years?

August 3, 2009 by

If you are an owner who isn’t sure about what you want, or when you want to leave, why is it so important to decide to act today? Why can’t you wait? 

·         Preparing and transferring a company for top dollar takes time—on average about 5 years. Most of those years will be spent preparing the business for the transfer. If you decide to sell to employees or children (two groups who rarely have any money), they’ll need that time to earn the money to pay you for your interest. You need to be working on family business succession planning.

·         More time often equals greater reductions in risk. Time can be used to design and implement income tax-saving strategies, build value, strengthen your management team, begin a gradual transfer of ownership (not control) to key employees or children. If you wait too long, you probably won’t have time to implement these strategies and you’ll likely end up transferring your business on less-than-ideal terms.

·         The market does not operate on your schedule and may not be paying peak prices when you are ready to sell to an outside party. Witness the state of the M&A market in 2008 and 2009: activity is almost non-existent in many business sectors and down in almost all. 

If leaving a company you’ve worked so hard to build and having little or nothing to show for it, is unacceptable to you, begin planning for succession today.

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Part – 6…Five MORE Things to Consider When Selling Your Business

May 8, 2009 by

In planning for succession from your business remember its not the will to win, BUT the will to PREPARE TO WIN that makes the difference. Here are five things that will help you to prepare your family business succession plan:

1.       Understand the letter of intent is a starting point for negotiations

2.       Understand that not all lenders are the same

3.       Keep running the business as normal

4.       Be flexible on business meetings and showings

5.       Learn how to confidentially market the business

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Exiting Your Business

March 25, 2009 by

What can exiting from your business mean to you? It can be as emotionally difficult as a bankruptcy or forced liquidation or it can be a planned sale with all debts paid, money for retirement and peace of mind. Planning for succession means you should plan to sell when the sale will provide the funds necessary to retire or move on to a new opportunity. It can also be passed on to your heirs, employees or partners with proper pre-planning to fund the sale.

Ralph Berge is a Cleveland Business Coach who helps business owners with succession management. Succession management is an exit strategy that simply means you have planned your transition and you are ready to take advantage of the options available to you. Call Ralph Berge, Business Coach 440-838-0991 to get moving on your business exit strategy.

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