There are seven paths to exit your business:
- Sell it to an outside party.
- Sell it to your family.
- Sell it to your employees.
- Liquidate it.
- Have someone run it for you as a semi-active owner.
- Have someone run it for you as a passive owner.
- Die and let it go into your estate.
No matter which of the first six routes you take, there are some basic structural changes to get in place, such as risk reduction. Eliminate the risk associated with employees leaving, clients leaving, accidents happening and catastrophe, both business and personal. Ensuring you have good systems and a team of people running those systems also is important.
There are some changes you will make that are very specific to your exit route as well. Selling to family or an employee is much different from maximizing the value of your business to an outside buyer. You will get higher satisfaction with fewer false starts by knowing upfront which direction you are headed.
In all cases, make sure your financials are in good shape, meaning they are trending upward over a three- to five-year period and are showing high earnings, high return-on-assets and a positive operating cash flow.
For more on preparing an exit, register for Scott’s workshop “Exit Planning—Build a Business that Runs Itself, Is Fun to Own, and Will Sell for More Money,” which will be held 1 p.m. to 3 p.m. Oct 23 at the Green Industry Conference.
