Business owners choose to sell for a variety of reasons.

Some wait until old age to retire and pass the business down to their children. Others make quick sales at the height of their success to move onto new opportunities. While another group may choose to sell after receiving an offer they couldn’t refuse. 

But, no matter what reason they choose to sell, they’re always full of questions on the when’s and how’s of the deal. 

Let’s take a look at some of the most popular FAQs surrounding exit strategies and exit planning.

What Should I Use to Determine an Exit Strategy?

Coming up with an exit strategy is like writing a road map to a destination. You need to know the ideal steps to take to ensure you arrive at the destination – a top dollar final sale price. 

If you take the wrong steps on the way to your destination, you may get lost and never get there or your journey could become a more complicated process. 

To write the directions to your final destination, you will need to factor in your goals and the methods you are using to get there. Start by coming up with a five-year plan for growing your business to create sustaining revenues based on continuous subscriptions or service calls.

Buyers like to see that not only do you have customers today, but, that those customers are likely to come back tomorrow even if the ownership changes hands.

When Should I Start Exit Planning?

It’s never too early to start exit planning. In fact, many smart investors think about how they will eventually sell a business down the line long before they make the initial purchase. 

Exit planning should be part of your company’s strategy. Set up your client base and workforce to be continuous and successful without your constant interference right at the start if you don’t want to have a ton of work to do when you go to sell.

How Do I Ensure a Top Dollar Sale?

If you want to ensure every penny of fair market value, you have to demonstrate both the current value of your company and its potential for future growth. 

Buyers respond to a rational negotiation atmosphere with plenty of comps to back up your valuation. It also helps to attach an emotional value to your company by engaging in fair business practices. 

Can I Achieve My Magic Number?

Every business owner has that one magic number that if offered all-cash tomorrow, would cause them to walk away. But, unless you are willing to wait endlessly for the market to catch up with your valuation, you may have to settle for less than your ideal closing price. 

Take all of the steps you can to plan your exit and hope that that one special buyer comes along. 

How Do I Prepare My Business for Exit?

To prepare your company to be sold, you need to have a dedicated and trained workforce ready to ride out the transition. This is a crucial factor in your sale. 

Buyers want to see that they are purchasing a company that can function without you as CEO and already has a bright future on the horizon.

Can I Ask for All-Cash at Closing?

As an owner, you can request any set of terms for a closing that you choose. But, you should realize that asking for an all-cash buyer is going to significantly limit your ability to find a qualified candidate. 

Many people purchase businesses because they believe they have the potential to make a lot of money in the process. They don’t always have the investment capital to back up their interest. But, if you come up with creative ways to structure a deal, it’s more likely to happen quickly.

Should I Accept an Unsolicited Offer?

Unsolicited offers are always worth glancing over. They can give you an idea of what someone else thinks your business is worth. 

But, until you’ve run your numbers through a variety of different valuation models and done the competition analysis, it’s unwise to accept an offer. Always do your due diligence, you never know if the person making the offer might have some kind of insider knowledge that lets them know your company will soon be much more profitable.

How Can I Get My Business Partners on the Same Page?

When you’re ready to sell your business but your partners aren’t quite there yet, it can put a lot of strain on the company as a whole. It’s best for everyone to be on the same page.

You may want to consider asking your partners to consent to have an official valuation and competition analysis done for your business. This document can offer valuable insight that could be used to sway their favor into selling. 

Should I Sell My Business to a Key Employee?

One great way to go about exit planning is preparing your business around a key employee or group of employees that are planning to continue in the industry long term.

By training them to take over, they may decide that they want to invest themselves fully in the business and buy it from you. Or, they may just be the top people you need in place to sell your company to another qualified buyer.

How Do I Ensure My Top People Stay After the Sale?

Ensuring your best employees stay after your sale is paramount to your business being successful long term. But, getting those people to stay during the transition can be challenging.

It may be helpful to offer them continuing education credits in return for signed contracts.

Will I Be Happy After I Sell My Business?

Selling your business will take you through a wide range of emotions. There will be the unknown excitement of putting up the initial listing. You’ll get your first offer. Then, there will be the throws of negotiations ripe with twists and turns of elation and insomnia. 

Next, you’ll experience the dissociating numbness of realizing your life is about to change drastically. Finally, you’ll likely come to a state of acceptance, hopefully, soothed by the gentle touch of a full price offer. 

To get through all of those phases, you’ll have to stay calm and focused. It also helps to have the right team around you. 

At Dolan Sales Inc., we are experienced in all phases of the business sale process. We can help you make this a positive and fruitful experience. Contact us today.