ATTENTION BUSINESS OWNERS
Master your business exit
Get the timing and price right...
From the desk of Gerry Lalonde, CPA, CGA
There is an ugly truth that most founders and business owners do not seem to recognize or acknowledge. Someday, they will exit their business. Hopefully it's done on their terms at a time of their choosing, but it might not be. Insolvency, illness and even death are not often planned for but they happen.
Regardless of the reason, an exit is inevitable.
The Numbers Are Staggering...
An estimated 80% of businesses that attempt to exit will never sell...
And of the 20% of businesses that do sell, many of them will never sell for a purchase price remotely close to what they should be worth...
A simplified view of the typical buy/sell process works this way.
A buyer looks at your revenue and EBITDA numbers, checks what industry you are in and applies a multiple that is standard for your industry and arrives at an estimated valuation.
But then they do a deeper dive into the business, called due diligence, and seek to identify weaknesses in the business otherwise known as risks that current performance may not be a predictor of future performance and they discount the price they are willing to pay based on the risks they have identified.
The problem for most business owners is that they have no experience or understanding of how this process works and discover, to their regret, that their business is not worth what they thought it was worth, and, worse , this means they can't afford to exit.
You Are Always Exiting Your Business, Even If You're Not Selling It...
The truth is that every business owner is always working on an exit, in one way or another, whether it's on your terms or not.
Being "Exit Ready" doesn't mean you have to be actively selling your business, it's about strategically and methodically positioning your business to be ready for an exit, if and when you choose...
But the vast majority of business owners are oblivious to these critical exits and unknowingly sabotage their ability to sell for a premium price and their potential to sell at all...
So ask yourself these questions...
Do you want to know what your business is really worth today?
Do you want to know what your business could be worth and therefore how much value is trapped and not transferable to a buyer?
Do you want to know how to release that trapped value and maximize the transferable value of your business?
And while doing this, make your business easier to run?
If you answered "YES!" to any of the questions above, then what I'm going to share with you next will help you understand why the next move you make could be the most important decision you ever make in your business because...
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