Note: This material is adapted from A Tale of Two Owners: Achieving Exit Success Between Business Partners, by Patrick Ungashick, CEO of NAVIX.
Are you thinking more and more about your future exit and realizing you have more questions than answers? Do you know what you want out of your exit but are unsure of the best plan to achieve your goals? Are you wrestling with your ideal time to exit? Unsure how to talk to your employees? Worried about your business partners? And what can be done to minimize taxes?
These are just some of the questions we commonly hear during the confidential, complimentary 45-minute consultations we hold with business owners to help them get ready for exit. For the fifth year in a row, this month we are standing by, ready to schedule a free consultation with you to answer your exit questions.
Dear Business Owner,
You might not like this letter. Reading it could help make you a large amount of money, save irreplaceable time, and avoid an inestimable amount of stress. But you still might not enjoy reading this because it contains some facts you may find hard to hear.
Our company does exit planning – we help business owners define their exit goals and then design and implement plans that achieve those goals. In our work, it’s common that one of the major obstacles to the owner achieving exit success is the owner him- or herself. Yes, often you comprise a large part of the problem. We usually don’t say this so bluntly because getting fired for tactless speech helps neither the client nor us. But the common reality is you – or more specifically, your habits and misconceptions – are a significant barrier to exit happiness.
If your exit strategy is to pass your business down to the next generation of family members, selling a piece of the company to an outside buyer may surprisingly make a lot of sense as part of your overall exit plan. Normally, keeping the business in the family means just that—preserving family ownership, not selling to an outsider. But selling a minority interest (less than 50%) of the company to an outside investor can help overcome some of the more difficult challenges that family business owners face in their exit and succession planning. Here’s how.
Athletes, celebrity entertainers, politicians, models—everybody seems to want to “go out on top” at the end of their careers. At first glance, it should be the same for business owners; they, too, should strive to go out on top when they exit from their business. After all, in order to sell the business for maximum value, create a sustained business legacy, and exit under their own terms, owners should exit at the business’s peak—right? Perhaps not.