I recently was asked by a colleague, “When you first engage with a business owner, what’s their perception about how difficult it is to sell a business?”

More often than not, selling a business is an overwhelming concept to a business owner and is behind the multiple reasons we hear from owners who argue that today is not a good day to start their exit plan – it can wait until tomorrow, or next month, or next year…. Years from now, some of these business owners may be in a panic because they are faced with leaving their business but have not planned adequately.

In addition to the ominous idea of selling their business, there are other fears and perceived obstacles to successful exit planning that we commonly find among business owners.

• Fear of the unknown
• Not knowing where or how to start an exit plan
• Uncertainty about what they’ll do once they sell their business
• Thinking that the business can’t run without them
• Believing that improvements within the company must be made before the exit planning process can begin
• External factors such as the economy, industry trends, and taxes
• Worry that transition planning may cause conflict within their family or between employees
• Feeling that they don’t have the time to plan for their exit

While these fears are understandable, most of them can be put to rest with the very planning that an exit strategy involves. Of necessity, my initial meeting with a business owner is typically educational. It’s an opportunity to tackle some of these common misperceptions and help the owner make sense of what’s involved in exit planning – and why it’s so important. Here are some of the things we’ll address.

• A realistic target date for the owner’s exit
• Financial objectives for the transition and lifestyle objectives afterward
• Various options for transitioning/exiting
• Company insiders and key players
• Third-party sales of competitors, sales within the industry, and M&A options if any
• Company financial information
• Owner’s estimate of company value and basis for the estimate
• Whether a valuation has been performed recently
• A list of any trusted advisors
• Schedule a time to meet the owner at the business location and tour the facilities

Compiling this information provides a solid foundation upon which we can start to build an exit plan and lay it out piece by piece, bite by bite. It suddenly feels manageable and much less menacing. After documenting these basics, the next step is addressing business value.

I find that most business owners don’t know the value of their business, which is foundational to exit planning. Knowing the value now and what the value must be to meet the financial needs of the owner when he or she leaves the company is the basis for the plan – which is all about how to fill that gap in valuation.

Exit planning may seem like a daunting task but it can be incorporated into the strategic and operational initiatives you may already be working on to build your business today. As an experienced exit strategist, I can help you separate facts from misperceptions and help you get over the hurdles – the most difficult of which may be getting started.

Our Exit Planning Peer Advisory Board (PAB) is an efficient, effective way to build your business today and develop an exit strategy concurrently. The PAB makes it easy to stay on track, with support from other business owners and regular one-on-one consulting from me built in.

Ask yourself, “What are my obstacles?”  Start now to seamlessly meld business growth and exit planning into your processes, and confidently and predictably create the future you envision. Contact me for a complimentary consultation.