As a business owner, there will come a time when you begin to consider selling the company, hopefully after years of growth and prosperity. Whether you are eyeing retirement or thinking of shifting your career path, you will need to determine the ideal exit strategy for the company and explore the options available to you. Here are a few to think about:
Internal Sale to Key Employees
You have likely built lasting relationships with some of your top personnel who have been loyal over the years and helped you build the business up. An internal company sale to employees who are ready to take on the additional responsibilities of ownership will avoid the extended time and risks of an open market transaction. This will also instill confidence in all your workers that you intend to keep things as consistent as possible during this transition and in the years to come.
The downside is that you may need to develop an affordable seller financing package that allows the employees to pay you over an extended period of time.
Engage with a Business Broker
You should be able to research the market and find a couple of business brokers who specialize in selling companies to other third parties in your industry. This process will probably involve considerable time and expense, however, the end result may be worth it. Make sure you conduct a thorough background check and interview process before committing to a company as you will be heavily reliant on their ability to successfully complete a sale which may take several months or even a year or more to finalize.
Develop your own Marketing Plan and Sale Strategy
If you have a lot of industry contacts and feel confident that you can manage the process independently, consider taking the time to develop a strategy to market your business solo. If you strongly believe you have the knowledge and experience, as well as the time, and understand the risks involved in this kind of venture, you might be best served to sell the company yourself, relying on the fact that no one knows your business better than you.
You should have your accountant, attorney, and any other key advisors involved in the process to mitigate risk and avoid miscommunicating information to potential buyers. This option has the most upside potential but higher downside concerns given the independent nature of the transaction.
In summary, this decision will be one of the most important ones in your life so take plenty of time to consider your options and seek advice as needed.