Transitional plans that allow business owners to sell businesses at the highest price in the shortest amount of time to the most quality buyers in general are the top of the wish list for most business owners. Because business owners live and exhale their businesses, they become emotionally bound with customers, employees, suppliers and other business partners because their business is a reflection of who they are.
Deciding to sell business and move to a new role far more complicated than those who realize most of the business. Of course, you can start by placing a business on the market and see what happens, but it’s not a good strategy. If customers, suppliers, competitors or others know, it can damage the business.
So where is the business owner starting? It’s my suggestion that one of the initial places is with a transition plan. The transition plan, at the simplest level, is an effort to define the needs of business owners and then systematically move to the results they want. And I’m not just talking about the actual business sales process. I would suggest the owner back to a more basic level and understand why they sell, what they expect to be achieved and perhaps the most important of all, what they plan to move and they are passionate about it. If they are not excited, it is likely they will do all the work to prepare a business for sale, advertise and market business, meet the buyer’s requirements, negotiate the agreement, do all the thorough tests, prepare to close the Escrow and then change their minds because they prefer to continue to have and operate business rather than playing round golf round or become a full time caregiver keeping big kids etc.
So what should be included in the transition plan? Questions and answers can be endless. That is what makes sense for their specific owners and situations. Some sample ideas include the following:
• Why do business owners want business ownership transitions?
• Is there a suitable candidate and if so, why? (The answer can be a family or current employee or a larger local competitor or …)
• If not, why not? (Is the business industry being dying, is there a new technology that comes that makes this business outdated, etc.)
• Are there specifics that will prevent business transitions that need to be removed?
• What is actually been transmitted?
• Does the business owner or an independent asset business that will appeal to buyers?
• How involved today is the current owner and if they are very involved, it is a process and procedure written that will help new owners and encourage them to take risks and buy businesses?
• What is the owner’s financial situation? That is, can they retire?
• Do owners depend on weekly or monthly income from the business if they stop because they no longer have a business, they can still survive?
• What does the owner do now?
There was no shortage of questions to be asked. What is important is to ask questions and continue to ask that they are all answered or clear what the next steps to do. The purpose of building a transition plan is clearly helping the owner arrive at a reasonable decision for them and empowered for the next step they take.
Andrew is a business owner of 5 times that helps entrepreneurs out or enter business ownership. The service includes helping owners sell and / or buyers to buy existing businesses or consult about buying franchises. He also provides machine assessment and certified equipment and business assessment.