Legal matters, business strategy, and life perspectives from the mind of a non-attorney.
If you would be so kind, please share this with others. The madness needs to end. People need to know what Exit Planning is. Thanks in advance!
If you’ve been following this since the beginning, you may remember that I wrote a post with this same title last November.
Fast forward 6 months, despite many related posts and marketing efforts, I remain convinced that people still have no clue what I do.
That’s on me. I haven’t found easy, simple ways to explain it.
All of that changes now. For once – and for all…
What is Exit Planning?
From the dawn of time, business owners have sold their businesses just like they would sell their homes:
“Alright, I’m sick of doing this, I want to retire.”
*Contacts Business Broker* *Business Broker lists the business for sale* *Interested parties make offers*
Everything goes pretty smoothly until an offer is accepted.
“Sweet, I have offers. I’ll accept the highest one.”
*Accepts best offer.* *Interested buyer conducts due diligence, finds a bunch of things wrong with the company.* *Offer is ‘renegotiated’.*
“Damnit. That’s a lot lower than before.”
At this point, the business owner is exhausted after spending MONTHS negotiating the deal. They feel mediocre and insecure due to all the nit-picking that the buyer is doing. They are stuck between a rock and a hard place – backing out means restarting the whole painstaking process and trying to find a new buyer, but moving forward means accepting a reduced offer.
“I just want this to be over with. Tell them they have a deal.”
*Deal closes* *Business owner goes to meet with accountant*
“Oh shoot. I forgot about taxes.”
“Pay off debt? I thought the buyer was assuming my debt!!”
And THAT is why 75% of business owners who sell their business feel “profound regret” about when, why, and how they sold within 12 months of the sale.
Don’t sell a business like you would sell a home
Selling a business is like WAY more difficult than selling a home.
When you sell a home, you have thousands of potential buyers.
When you sell a business, you have a handful.
When you sell a home, your buyers are not highly educated and often let emotion or feeling dictate when making their decisions.
When you sell a business, your buyers are highly educated and rely on concrete fact and skilled negotiations when making their decisions.
When you sell a home, an accepted offer may lead to a closing in a matter of days (and that offer is unlikely to change).
When you sell a business, an accepted offer may lead to a closing in a matter of months (and that offer is likely to be renegotiated along the way).
Practice makes perfect
Your kid wants to get better at basketball. What do you tell them?
“Practice! You need to get your butt out on the court instead of playing Fortnite all day.”
Heed thine own words.
You want to exit your business smoothly? Here’s what I tell you:
“Practice! You need to put the time in and plan out your exit if you want to avoid disaster.”
Exit Planning offers business owners an opportunity to learn, practice, and strategize in a safe environment. It offers business owners the opportunity to simulate the Due-Diligence experience so they can correct areas of concern before a potential buyer ever sees them.
Business owners get a “report card” and a detailed list of action items that they would be wise to accomplish before listing the company for sale. If they want our help in implementing the plan – great, we can do that! If not, there’s no hard feelings.
But what if a business is being passed to family or management team? In that case, is there anything to practice?
Basically, all the same principles apply AND we are faced with the additional challenge of helping your successor obtain financing.
Epiphany Law will conduct Due-Diligence on your company and tell you what to do in order to sell your business for more money.
Business Owner Beware
Exit Planning is a new practice, and it is becoming “trendy” among advisors who see it as an opportunity to generate new business.
I can vouch for the process we have. We give WAY more value than we receive for our services. I cannot definitively say the same for others.
Give us a call or shoot me an email if you have more specific questions!
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