Learn Key Goals and Objectives for Your Exit Strategy
Learn the essential steps to achieve your desired outcome when selling your business. Explore the options to consider while developing your exit strategy. Your main priorities will help shape your exit plan and prepare your business going forward. Excerpted from BizBuySell's Guide to Selling Your Business.
Transcript
The first step in exit planning is to establish the outcome you seek to achieve through the sale of your business.
Your sale goal. What is your desired sale outcome? To sell your business in part and remain involved with its operation, To sell your business in full and remain involved with its operation. To sell your business in full and end involvement with its operation.
Your timing objective. For what exit time frame are you aiming? Immediate 0 to 6 months. Within a year. Within two to three or more years.
Your financial objective. What is your financial expectation? My business is in strong condition and likely to command a high earnings multiple. I am prepared to accept a lower price due to my timing urgency and the current condition of my business. I am willing to commit time and effort to strengthen my business condition and therefore improve its likely attractiveness and earnings multiple.
Your payout objective. Will you require all cash at closing? Or are you willing to offer a seller financed loan, realizing that all cash closings most often result in lower sale prices.
Your sale marketing objective. Have you defined your preferred buyer? Or are you interested in selling to any qualified buyer whether a business or an individual?
I prefer or am obligated to sell to a partner, key employee, employee group, or family member. I intend to pursue a sale to a targeted business such as a supplier, competitor, or strategic business buyer. I seek to sell to any buyer who has the necessary financial expertise and management capability to buy my business.
Your personal post sale objective. I want to stay involved with my business after its sale in a managerial capacity or as a consultant or board member. I am willing to remain involved over a post-sale transition period of 1 to 3 months or longer. I prefer to end my relationship with the business upon completion of the sale.
Your post sale objective for your business. I prefer to sell to a buyer who plans to retain employees and to cause little disruption to staff, clients, or customers of the business. I am willing to sell to a buyer who plans to merge, move or significantly alter the business.