Do you want to know the big question we ask business owners who attend our exit planning conferences?
We ask: What kind of business owner are you?
Because there is a significant difference between business owners that proactively plan for their eventual succession versus those that do not.
Potentially millions of lost value when the eventual business transfer takes place. Every business owner needs to carefully consider this reality. If your largest single investment is in your business AND if you have no plan regarding what to do with it when you eventually retire, then you could not only be losing out on significant potential income from its sale but your family and financial legacy could be impacted as well.
There are only two kinds of business owners:
The fact is you will eventually depart from your business. As much as you want to put that off for as long as possible, the reality is, no matter how hard you try to avoid it, a business transfer will take place. Whether you assume that your children will eventually take the reins of the company or you hope your employees will buy you out, or best of all: A third party pays you a significant sum for your company, a succession event will occur at some time in the future.
How prepared you are personally and how equipped your business is for this transfer will depend, to a large degree, on two things:
Both often play a role simultaneously in how the exit works, no matter what method you use to facilitate your exit event. In reality, you need to look at your succession not as an event that will take place at a point in time, but rather as a process that you need to initiate the day you open your doors for business.
Building a “buyer ready” business requires planning, thoughtful deliberation and hard work. But all this will pay off when you do eventually leave the business to a buyer. Building a buyer ready business essentially means that you are creating an entity that buyers will view as less risky than those opportunities where the company has not prepared for their succession.
Risk is the common denominator among all buyers no matter if they are strategic, synergistic, in your industry, outside of your industry, or purely financially driven. Each buyer will determine the level of risk and his/her comfort level with the preparation you have made to build a company that is ready for your eventual transition.
What are common traits that that buyer ready businesses have? What we have seen over the years and what we hear from buyers is this:
These eight items, if focused on and addressed regularly, can have a huge impact on reducing the perceived risk in your business on the part of buyers. Keep in mind that no matter how well it’s managed and run, there is no such thing as a perfect business. In fact, many of these eight are moving targets and are “in the eyes of the beholder.” So, don’t look at this list today and become discouraged thinking, “Wow, there is not a buyer out there that would be interested in my company”.
The reality is the path to being buyer ready is never-ending. The key is starting on it now and beginning to address any (or all) of the items above. Even if you haven’t addressed on one or more of these today, all buyers will be concerned about is that you have a plan in place to reach them. And if you are following your plan, then buyers will have significantly more confidence in your business than if you have no plan at all.
That really is the beauty of the Generational Equity exit planning program. All our clients are provided with A Roadmap for Enhancing Value document at the end of our initial evaluation. This allows them to clearly understand what needs to be done to both enhance the company’s value over time but also improve its salability in the eyes of most buyers.
If you are interested in moving from the category of being a business owner with no exit plan to one with a full strategy, then attend a Generational Equity M&A executive conference. To learn more about this no-obligation, complimentary meeting designed to help business owners begin to build a buyer ready business, please follow these links:
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2017 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.