Why Businesses Fail to Sell You're Poorly Positioned to Sell-And the Potential Profit Is Too Low
When owners decide to exit, they realize they haven't allowed themselves enough time to position their businesses for transition, minimize taxes, or maximize net proceeds. They end up with significantly lower net proceeds.
CEPAs have been known to help their clients increase profits on a sale by significantly above the original valuation.
Life Happens-And You're Unprepared
Many owners are unprepared when an unplanned event affects them and forces them into an exit that's not on their terms or timeline.
Even worse, sometimes owners receive an unsolicited offer from a buyer, but their lack of readiness prevents them from harvesting the full value of their business.
Examples of some unplanned events may include death, disability, disagreement with partners, or divorce.
You Can't Pass the Due Diligence Test
When the time comes, many owners just can't sell. Private equity and strategic buyers are seasoned and selective. You might be unable to complete a sale (or even a partial sale) of the business to a third party because the business is unable to pass the due diligence test.
Your Business Is Too Risky to Sell
Many business owners eliminate their inside options, including transitioning to a family member, employees, or partners because the business can't operate without the owner and is potentially undercapitalized, has insufficient cash flow, or has too much risk to succeed with an inside option.
Helping You Increase Business Value and Efficiency
We use the Value Acceleration Model to help you increase the value of your business. It's a proven methodology that reduces risk, increases value, and positions your business to be more profitable, more efficient, and more scalable.
The Exit Checklist
A 5-Step Personal Action Plan For A Happy (And Lucrative) Exit From Your Business
Why do you want to exit your business?
In most cases, there are a combination of factors that are either "pushing" you away from your business or "pulling" you to something else.
Often, when we think about exiting a company, we conjure the image of a spectacular business sale where a strategic buyer swoops in, pays an enormous price, and the business owner rides off into the sunset.
The reality is that there are several different ways to exit the day-to-day operations of your business, and the smartest founders align their exit type with their reason for leaving.
The ultimate judge of your company's value is the market itself. No matter how much you want for your company - or what you think you need - if the market says the business is not worth that, then you're out of luck.
In addition to getting a business valuation to understand what your company might be worth to a third party, there is another calculation you should make, which is to understand what your business is worth to you.
For most owners considering exiting their business, they imagine an all-cash offer and leaving their company shortly after depositing the check. However, most exits are more gradual and rely on the owner's continued involvement after the sale.
It's important to get clear on the maximum amount of both time and money you're willing to commit after a transaction. As a general rule, you stand to earn more money from the sale of your business the more willing you are to participate in a transition period.
At one extreme, you may have built up enough investable assets outside of your business to be financially secure, and you are willing to continue to be a shareholder in your company for the long run. If this is you, then hiring a CEO and relinquishing your day-to-day responsibilities may be your best exit option.
At the other end of the spectrum, you may have another business you want to start immediately and therefore want to maximize your cash proceeds and minimize your time in your company post sale.
In this scenario, you would look to sell your business outright to a strategic buyer. No one point on the Exit Matrix is better or worse than the other. The key to a happy and lucrative exit is to get clear on your priorities before you start the exit process.
Exit Matrix
Your final step to a happy and lucrative business exit is to pick your spot on the Exit Matrix, which corresponds with two factors:
- How important is it that you maximize the cash proceeds
of a sale? - How long are you willing to stay on post sale?
Working with a CEPA gives you a better business whether you sell or not. Who Do You Have in Your Corner?
Who do you have in your corner helping you navigate all the pitfalls of selling a business?
So many business owners try to go it alone. When they don't fail outright (and so many do), they often get significantly less money than they hoped for.
Your CEPA knows where the problem areas lie for most business owners and can help you identify your business' weaknesses, strengths, and how to make the most out of both.
Deep Education
In addition to completing a 4-hour proctored examination, CEPAs must complete a comprehensive master's level 5-day course from the Certified Exit Planning Institute. Every 3 years, CEPAs must complete a minimum of 40 hours of continuing education.
Your Business Is Too Risky to Sell
Many business owners eliminate their inside options, including transitioning to a family member, employees, or partners because the business can't operate without the owner and is potentially undercapitalized, has insufficient cash flow, or has too much risk to succeed with an inside option.
Exit Planning Resources
Articles, Videos and Resources to Help You Prepare
Resources for HVAC Companies
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