Emotional Challenges for Executives, Managers and Business Owners

Partnering with Executives to Break Through Fear, Anger and other Emotional Barriers to Success

Business Valuation and Exit Planning


Business Valuation and Exit Planning

One of the most heart-wrenching decisions any business owner faces is what to do with his or her business when they want to be “less involved.” There are many emotional and important factors that must be faced effectively to develop an effective business exit plan. It is best to start early (as much as 5 years from the earliest date of disposition) to lessen the emotional impact on the owner during execution of the exit plan.

The basis for any exit plan is an honest business valuation. You need to know what your business is really worth on the market. In most cases a business owner over-values her business baby. She has put her very soul into making it successful and it means much more to her than what someone may be willing to pay in real money.

Getting a business valuation from someone like Synergy Business Services will start the process. Their low cost objective valuation of your business is a starting point for exit planning. In many cases, there are things that you can do to enhance the real value of your business before the critical moment of disposition that will make it more profitable in the short and long term, therefore more desirable to a potential buyer.

Armed with objectivity and a plan for profitability, you can be much more confident in your decision making as you move toward releasing the business to your successor.

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2 thoughts on “Business Valuation and Exit Planning

  1. Business owners underestimate their “emotional readiness” when it comes time to leave the business, for whatever reason — be it through a planned exit or an unexpected trigger event like an illness.

    In my experience as a business broker, emotional issues torpedo deals more often than anything discovered on a financial statement. The business owner’s primary concerns revolve around questions like:

    * What will I do after I no longer own my business?
    * Who will I be (i.e. loss of purpose, as well as social standing in the community)?
    * How will my employees & family react to my decision? Am I betraying them?
    * Will I have enough money?

    Two books I would recommend for business owners who know they need to plan their exit, but either don’t know how or are having trouble coming to grips with letting go:

    Exiting Your Business, Protecting Your Wealth — by John Leonetti
    Finding Your New Owner, For Your Business & Your Life — by Jack Beauregard

    This is a great post, and a great topic! I could go on forever — but business owners are welcome to contact me at Synergy Business Services [barbara@synergybiznwa.com]. I have several posts on my New York Times blog that also address emotional issues, like this one:

    http://boss.blogs.nytimes.com/2011/07/21/when-words-get-in-the-way-of-selling-a-business/

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