What’s The Purpose of Selling Your Business?
Why do you want to sell your business?
A business owner I interviewed for The Business Transition Crisis shared that the day he saw the money in his bank account from the sale of his business was the happiest of his life. Unfortunately, it went downhill after that. He got sick and it took him two years to recover from the sale of his business. He had more money than he knew what to do with and he deeply regretted the loss of those two precious years. Ultimately, he realized that he had spent all his time prior to the sale focused on the business but no time figuring out what he wanted to do afterward.
It’s a good idea to figure out why you’re selling, what you’re hoping to achieve, and what will make you happy. There might be multiple reasons. Maybe you want to:
- Spend more time with family and friends
- Reduce your stress and commitments
- Get out before the value of the your business drops
- Capture the value and put it in the bank to secure your retirement income
- Have more flexibility in your schedule to do what you want, when you want
- Volunteer and spend more time doing charitable work or making a financial contribution to a favourite charity
- Have your kids step up and take over
- Start a new business
- Give your managers a bonus in appreciation for their loyalty and commitment
Maybe you’re just tired and ready to let go. Without clarity, you might not get the results you want. When you know your purpose, you can begin to set important goals. It’s a good idea to determine:
- How much money do you need, after taxes, to realize your post-transition purpose?
- What do you need to do in advance to assure you meet that number?
- When is the best time to sell?
- Whom do you need to involve: managers, family members, advisors?
- What do you have to stop doing?
- Who are the champions that will help you move forward?
- Do you have a target date?
- Do you need to invest in training for managers or your successors?
- Do you need to get a valuation of the business to establish a baseline?
- Do you need to start connecting with possible buyers?
- What additional knowledge, courses, or books do you need to take advantage of to make this work?
Once you are clear on your purpose, you can focus your energies on how to achieve it.
January 6, 2020
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