If you think you only have one option for what to do with your business, when it’s time to slow down, think again. There are many possibilities. Unfortunately, a recent survey found that 40% of business owners don’t think they can sell their business so they plan to just wind it down and close it. But, if they think ahead and get innovative they might find other options.
If you are considering a change, here are ten options you could choose for your business in the next few years. If you think of others, please share!
- Sell it to a relative; maybe a son, daughter, former spouse, cousin, nephew, sibling, or a combination of these. You might be surprised at who is interested in taking over your business – if they were given the chance.
- Sell it to an employee, a group of employees or all the employees. This can be done through a buy-sell agreement, an Employee Share Ownership Plan (ESOP) or by turning your company into a co-operative (Co-op) business.
- Recruit someone to start as an employee with the intent of him/her learning the business, becoming a partner, and ultimately buying you out. Think of a former employee who was ambitious and left you to work with another company at a higher level.
- You might choose any of the above ideas, retain a percentage of the shares and continue to work part time, just for fun or to continue receiving income from the business. Set a buy-sell agreement in place and fund the buy-out with life insurance when you die.
- Buy your competitor(s), grow the business, and sell at a much higher price than if you were just selling your existing firm.
- Wind down the business quickly or over time and focus on serving a small group of customers part time, until poor health or death makes it no longer possible.
- Break your business into two or more separate entities. Keep one to play with and sell the others.
- Sell to an investment group, a competitor or a supplier.
- Hire a consultant to help you improve your business, then sell it to him/her.
- Contract a business broker or an investment banker to sell it for you.
Set a target date for transitioning the business. Then, get innovative and think about your options beyond just selling or closing the doors.