As we discussed a few days ago, Axial, a leading online platform that introduces capital providers with business owners and buyers, recently published a tremendous whitepaper entitled “The CEOs Guide to a Successful Exit.”
The strength of this whitepaper is due to the fact that it is based on input from a number of Vistage “coaches.” In case you are not familiar with Vistage, it is a fantastic, peer-based CEO educational group, providing local chapters with speakers who are experienced in developing and mentoring business owners.
I found the information in the whitepaper helpful and timely because it really gets to the heart of the matter relating to how to effectively exit. Two days ago we looked at the need to plan for your post-transaction life long before you get to that point.
Today we take that one step further and with input from sage Vistage coaches, we delve into a topic that really is not examined in depth enough: Answering the “why” of your exit plan. Here is how the whitepaper posits the question:
There are a number of reasons that an owner may be ready to pass the baton. It’s not always all about the money. “Start with the why,” recommends Chuck Andrews, a Vistage Chair in Chicago. “Why are you doing it? What are you going to do afterwards?”
The reason that addressing this question is important is simply this: Selling a company under the best of circumstances can be an arduous, time-consuming, and often emotional experience. If you are not 100% sure of your motivation, if you waver at all as the final bell rings, you may walk away from an excellent deal simply because of a lack of understanding of why you are planning to exit.
That not only can be financially ruinous to you, it most likely will create a host of confidentiality issues both internally and externally. So it is far better to fully understand the “why” associated with your exit long before you reach that point.
Unfortunately far too often external circumstances force the “why” to become immediate, not planned in advance. I am referring to when one of the big D’s rears their ugly heads: Death, Disability, Divorce, Disagreement among partners, and/or Disinterest – a.k.a. boredom or burnout.
When one of these forces an owner to sell, the process is usually not at an optimal time and the deal is often to the benefit of the buyer, not the seller. This is how the Axial whitepaper describes the situation:
“When things are going well for an organization is the best time to look for an exit. Unfortunately, most business owners aren’t looking to exit because that’s the time they’re having fun,” says Bob Berk, a Master Vistage Chair in Chicago.
“In some cases, the current ownership may have pressing personal reasons to exit such as irreconcilable differences between the co-owners, lack of an heir, or health problems.”
As we have examined in past posts, the optimal time to exit is when the market indicates that it is time and the business is performing reasonably well. Timing, as with all things, is the key. But the real key to timing an exit is planning, understanding your motivation, and moving quickly once the stars align.
Time and space do not allow me to further drill into this topic. If would like to learn more about effective exiting, I invite you to attend a Generational Equity exit planning seminar. We hold these throughout North America and they are designed to aid business owners in developing exit plans that meet their personal and business financial goals.
To learn more, call me at 972-232-1125 or visit our website to look at a list of our pending seminar locations:
Carl Doerksen is the Director of Corporate Development at Generational Equity.
© 2016 Generational Equity, LLC. All Rights Reserved.
The information we learn from customers helps us personalize and continually improve your experience at gencm.com. Here are the types of information we gather.
Information You Give Us: We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice. Our computer system protects personal information using advanced firewall technology.
Information from Other Sources: For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Capital Markets LLC may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Capital Markets, L.L.C. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Capital Markets LLC at is office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
INFORMATION ON THIS WEB SITE IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Capital Markets may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Capital Markets does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Capital Markets will be deemed NOT to be confidential. By sending Generational Capital Markets any information or material, you grant Generational Capital Markets an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Capital Markets is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Information Generational Capital Markets publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Capital Markets intends to announce such products, programs or services in your country. Consult a Generational Capital Markets representative for information regarding the products, programs and services which may be available to you.
Generational Capital Markets makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Capital Markets web site, please understand that it is independent from Generational Capital Markets, and that Generational Capital Markets has no control over the content on that web site. In addition, a link to a non-Generational Capital Markets web site does not mean that Generational Capital Markets endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Capital Markets BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Capital Markets.
Honored to win Investment Banking Firm of the Year 3 years running.
Over 50 awards and counting.
Sign up to receive regular email updates, industry-leading insights and details on complimentary M&A executive conferences in your area from our award-winning team
Success, you have been added to our list.