Private business exit - 16 questions to develop a plan
Yesterday I wrote about the possible challenges for owners of established midsize businesses who want to exit their investment. In an occasional series, I’ll cover how to address those challenges. I’ll be drawing on my experience of being involved as a CEO, owner, director and/or adviser of mid-size businesses undergoing or thinking about ownership change, as well as having been involved in pre- and post-deal situations on both the buying and selling side (mid-size and large size).
Your exit might be many years away, but it’s never too soon to start planning for it. These are some questions I’d be exploring with you:
- Why are you selling?
- What exactly does your business offer the world?
- What are your goals and dreams - inside the business, outside the business and after the business?
- How attractive is your business, and what’s wrong with it?
- Who are your key people, customers, suppliers and partners, and are you vulnerable to their departure?
- How do you make yourself unnecessary to the business?
- Which buyer types should you target?
- Who would want to buy it and why; who should, but doesn’t, and why not?
- Should you sell gradually or all at once?
- Should you sell to family and/or staff?
- What should you do to improve your business attractiveness?
- What should you do to be ready for sale?
- How do you manage the sale process? Part I, Part II
- What’s in a good sale agreement for you, and for your buyer?
- How do you ensure a successful transfer?
- How much should you be involved after the deal is done?
The best way to have a great business to sell is to have a great business. Actions you’d do to prepare your business for sale are often actions you should do anyway. The answers to these questions and the ensuing discussion will help you formulate a business plan with successful exit in mind. I’ll be addressing each of them over the next few months.
PS. I have other questions when looking at raising capital for expansion and when looking at an acquisition, but those are for another time.
Trackback uri
June 29th, 2008 at 9:28 am
In my area in the U.S., I am seeing various manufacturing companies who are ready to buy and to sell. Both small and medium-sized private companies in various manufacturing industries have been doing well. It surprises me frankly. The other major industries are in a down turn. Have others seen stable companies in manufacturing that are interested in expanding or selling their companies due to stable earnings?
June 29th, 2008 at 9:55 am
Thanks for your comment. Scott. Good mid-sized firms seem to find a way through the tough times despite all the difficulties. Isn’t that great! It always seems to come down to the fundamentals of business - keep your product fresh, look after your customers (but don’t get screwed), run a lean ship, keep your people enthused about what they do, don’t be too timid to change. That puts them in a good place to both buy and sell.
July 8th, 2008 at 11:40 pm
[…] Private business exit - 16 questions to develop a plan […]
July 21st, 2008 at 1:04 am
[…] En Avant: Private business exit: Q2. What exactly does your business offer the world? […]
July 22nd, 2008 at 4:16 am
[…] En Avant: Private business exit Q3. What are your goals and dreams? […]
August 1st, 2008 at 1:03 am
[…] En Avant: Private business exit: Q4. How attractive is your business? […]
August 14th, 2008 at 8:11 am
[…] En Avant: Private business exit: Q5. Who are your key people, customers, suppliers and partners? […]
August 21st, 2008 at 2:12 pm
[…] En Avant: Private business exit: Q6. How do you make yourself unnecessary to the business? […]
August 27th, 2008 at 9:17 am
[…] En Avant: Private business exit: Q8. Who would want to buy it and why? […]
September 2nd, 2008 at 10:32 am
[…] En Avant: Private business exit: Q9. Should you sell gradually or all at once? […]
September 10th, 2008 at 3:38 pm
[…] En Avant: Private business exit: Q10. Should you sell to family and/or staff? […]
September 19th, 2008 at 1:04 am
[…] En Avant: Private business exit: Q11. What should you do to improve your business attractiveness? […]
October 6th, 2008 at 10:47 am
[…] En Avant: Private business exit: Q12. What should you do to be ready for sale? […]