Getting to Day 1: Selling or transitioning your company
This topic first came to my attention when my father talked about selling his solo-practice dental office. The long and short of it is that he was a fantastic dentist, and a good small business owner, but has no idea how to sell his business. No fault, no knock on intelligence or personal ability, it is a knowledge and experience issue.
I am now seeing this issue with other family businesses. My mother’s company, mid-sized and solo-owned, has been 2 years away from selling for almost 15 years now. I have an ownership stake here so I’m motivated on this topic. And now my Uncle, the owner of a business with appx. 30 employees. All are seeking my help as a sounding board, educator, as well as a facilitator.
Then just last week I answered and AVVO question on the same topic.
After your family, education, and home, your business is probably the next most valuable asset you have. If you are a solo-owner this might be your entire retirement fund. With that price tag, it is important to remember the grand old phrase: “Hope is NOT a Strategy.”
I’m certain I’ll write quite a bit more on the subject over time. However, this is a ‘Getting to Day 1” article. So here is what you should focus on first:
- Your definition of success;
- Your walk away price;
- Your hopes and dreams price;
- Date when you are ready to accept an offer;
- Date when you want to have an offer by;
- Is the business understandable to an outside party;
- Do your products, procedures, clients, and accounting make sense;
- Are you emotionally ready to walk away; and,
- Who do you have that can help? Are there consultants that you need?
These questions should lead you to a concept of what you are doing, why, and what the expectations are. The actual “Day 1” is to have your business in a state of preparation where you can actively find a buyer.
It needs to be said that ‘hope is not a strategy.’
But hey, what do I know?