Don’t Plan to Sell your company. Just let it happen.
You may delay, time will not, and lost time is never found again. ~Benjamin Franklin
There’s an old saying: “A failure to plan is a plan to fail.”
If your business has grown to the point that you are out of “survival” mode, when you were just hoping to get to the end of the month with some cash left over, you should be planning on what you want out of the company. Is it a lifestyle company for you and your partners? Are you trying to make a difference with your product or service?
We talk to business owners every day and many of them tell us they just can’t focus on a plan for the future. Here are some of the top excuses we’ve heard:
- I’ve always done it myself.
- It just never gets to the top of the pile—I work on the “urgent” issues of the day.
- Planning just can’t compete with the “noise of the day”—distractions such as the office, the employees or e-mail.
- I hate to admit it but I am insecure working in financial applications of the business—I am an operations expert.
- Emotionally, I am not ready to tackle this issue.
- I like to be spontaneous; prefer to react rather than plan.
- I am unsure my life balance will improve. I am comfortable with my “known” situation even if it is painful.
- I will die at “my desk.”
- I am already too busy with “stuff” that drains me.
- I already have advisers I trust.
If you choose “Do Nothing” as your plan for the future, there are some potential disasters around the corner.
- Partners may be forced to sell at an inopportune time. Death, injury or illness can create an unplanned selling opportunity.
- If your company “can’t get along without you,” you may be forced to sell your company for the value of the assets. Depending on your firm, this may be only some obsolete computers and office furniture.
- Heirs may be unable to step in and run the company. Does your spouse want to work with your partner? Or vice versa? Do you have one child working with you and another who doesn’t? How will they divide up the proceeds fairly?
- The economy may not be favorable for valuing your firm at the time you need to sell.
- The sale of your company may not generate enough for you to retire on. Have you thought about the next chapter of your life and how long your money will last?
- Timing may not be attractive for your industry sector. Negative press about others in your industry may depress prices across the board.
- You may not have the right management team in place to be attractive to the buyer.
- Your employees may not stay around after you’re gone.
- You may not have adequate financial controls and measurement in place at the time you are approached to sell.
These observations are based on the professional experience of Ron Schutz and are not based on any statistical research.
Securities and advisory services offered through World Equity Group, 1650 N. Arlington Heights Road, suite 100, Arlington Heights, IL 60004, 847-342-1700 Member FINRA, SIPC Investment banking offered through North View Investment Banking Group. Ron Schutz-Planning Business Transitions, LLC and World Equity Group and North View Investment Banking Group are independently owned and operated.