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HOW TO EXIT YOUR BUSINESS WHEN YOU DON'T HAVE A BUYER

Like most everyone else, business owners will eventually retire from their businesses. With retirement peeking its head around the corner, how do you plan to make an exit?
 
Selling is usually the preferred exit strategy for a business owner. However, there is not always a buyer willing to pay full market value. As a result, alternative exit strategies need to be explored and employed.
 
STRATEGIC ACQUISITION
 
Chances are that your business could prove valuable as a piece of someone's else's. It's never a bad idea to market your business to one attempting to make a strategic acquisition. If what you're selling matches up with a firm's internal needs, they may be inclined to purchase it from you to strengthen their base.
 
For instance, imagine you own a tomato farm and are looking to retire. While it may be challenging to sell your tomato farm at its full value to just anyone, you may find it easier to sell to a salsa or pizza sauce company as a way to internalize their supply chain. Sine they would no longer need to pay someone else to supply their tomatoes, these firms may view the purchase as a particularly strategic acquisition.
 
FIRE SALE ACQUISITION
 
Unable to sell at a full market value? Another option for exit would be a "fire sale" acquisition, through which you can sell your business to another below market value. While this may not be the most desirable option, it allows for a quicker sale and exit in a pinch.
 
SELL TO A SUCCESSOR
 
Maybe you feel more inclined to have your business run by a trusted successor. You worked to build this business, and you want to see it run properly in the future. Taking a family member or executive under your wing for training leading up to your retirement accomplishes just that.
 
This successor can be trained until their eventual purchase of the company, permitting a clean and total exit from the firm. They will then take over your role as both owner and chief executive.
 
DON'T SELL TO A SUCCESSOR
 
Alternatively, you can maintain your ownership while rewarding your successor for strong performance as the company lead. This approach affords the responsibilities of chief executive to another but keeps you on as owner of the business.
 
CREATE AN ESOP
 
Not comfortable with any one successor? You may want to consider drafting an Employee Stock Option Plan (ESOP) before your retirement.
 
With one or two years of planning, the savvy business owner can design the passing of responsibilities and ownership to multiple internal employees. This can enhance worker efficacy, resulting in greater performance as individuals and, ultimately, a collective firm.
 
SELLING YOUR ASSETS
 
The options above are undoubtedly the preferred course for most business owners. Still, with time constraints and a lack of available buyers, you may find yourself unable to carry out any of the above strategies. At this point, selling off your assets will be your only option.
 
Dissolving your business into assets is likely the least profitable and most disheartening option to a business owner. To avoid this, it is imperative that you start planning your exit strategies in the years leading up to retirement.
 
Want to talk with someone about your business's exit plan? Contact Erik Roemer, Gerber's CEPA certified Chief Compliance Officer, for more information.


INDEX
  • WHEN SHOULD I HIRE A CHIEF MARKETING OFFICER?
  • WHEN SHOULD I HIRE A COO?
  • HOW TO EXIT YOUR BUSINESS WHEN YOU DON'T HAVE A BUYER
  • WHEN SHOULD I HIRE A CHIEF FINANCIAL OFFICER?
  • IT'S NOT THE GREAT RESIGNATION; IT'S THE GREAT REALIGNMENT
  • WHEN SHOULD I HIRE AN HR MANAGER?
  • WHY YOUR BUSINESS NEEDS A PRICING STRATEGY
  • THE 4 Cs OF EVERY SUCCESSFUL BUSINESS
  • WHAT IS A CEPA ADVISOR AND HOW CAN ONE BENEFIT YOUR BUSINESS?
  • THE FALLOUT ON CULTURE WHEN YOU DON'T HIRE A PLAYERS
  • THE ROLES OF SALES IN YOUR SMALL BUSINESS
  • FINDING THE PERFECT GIFT FOR THE ENTREPRENEUR IN YOUR LIFE
  • THE BENEFITS OF OWNING A SMALL BUSINESS
  • WORKFORCE IN MOTION
  • GOAL SETTING FOR 2022: WHAT TO DO NOW TO BE SUCCESSFUL NEXT YEAR
  • LESSONS LEARNED AFTER PUBLISHING MY FIRST BOOK
  • WHY YOUR BUSINESS NEEDS INNOVATION
  • THE COVID-INSPIRED SPIKE IN ENTREPRENEURIALISM
  • THE PROS AND CONS OF OUTSOURCING YOUR FINANCE AND ACCOUNTING SERVICE
  • HOW TO SET GOALS IN 2021
  • THE LEADERSHIP EVOLUTION OF YOUR BUSINESS
  • HOW TO GET THE MOST OUT OF YOUR ADVISORY BOARD
  • THE PANDEMIC-INDUCED INNOVATION OF MEETINGS
  • HOW TO USE THE 8 P'S OF MARKETING TO GROW YOUR BUSINESS
  • BEST PRACTICES FOR COLLEGE FINANCING
  • SCALING A BUSINESS - ARE YOU READY?
  • THE HALFWAY POINT: IT'S TIME TO REVISIT THOSE BUSINESS GOALS
  • GROWTH WITH PURPOSE: SUCCESSION PLANNING
  • GROWTH WITH PURPOSE: EVOLUTION OF FAMILY LIFE
  • GROWTH WITH PURPOSE: FINANCIAL RISK
  • GROWTH WITH PURPOSE: INTEGRATION
  • GROWTH WITH PURPOSE: WHY ARE YOU GROWING YOUR COMPANY?
  • GOAL SETTING 2020: HOW TO KEEP YOUR GOALS FRONT AND CENTER ALL YEAR LONG
  • ASK GERBER: HOW TO STAY LASER FOCUSED DURING THE HOLIDAYS
  • Ask Gerber: How to Identify Your Business's Culture When You Don't Think You Have One
  • Ask Gerber: When Should I Hire a Professional Manager?
  • Ask Gerber: Should You Mix Business with Friendship?
  • ASK GERBER: HOW DO I ESCAPE THE ENTREPRENEURIAL SLUMP OF FEELING TRAPPED IN MY BUSINESS?
  • ASK GERBER: HOW CAN ENTREPRENEURS CREATE SHARED EXPERIENCES WITH THEIR CHILDREN?
  • Ask Gerber: How Can I Recognize Permanent Failure as an Entrepreneur?
  • Ask Gerber: How Can I Recognize and Overcome Temporary Failures?
  • ASK GERBER: HOW DO I HELP EASE EMPLOYEE STRESS DURING BUSY SEASON?
  • ASK GERBER: DO I NEED TO HIRE HR?
  • ASK GERBER : DO I NEED A CEO?
  • ASK GERBER: DO I NEED TO HIRE A COO?
  • ASK GERBER: DO I NEED TO HIRE A CMO?
  • ASK GERBER: DO I NEED TO HIRE A CFO?
  • ASK GERBER: HOW DO I KEEP PASSION AND PROFITS TOP OF MIND IN MY BUSINESS?
  • ASK GERBER: WHY DO I NEED TO INVEST IN HOSTING AN ANNUAL RETREAT FOR MY TEAM?
  • ASK GERBER: HOW CAN I ENGAGE WITH MY CLIENTS/PROSPECTS WITHOUT BREAKING THE BANK?
  • ASK GERBER: WHAT IS A CLIENT SERVICE MATRIX? PART DEUX
  • ASK GERBER: WHAT IS A CLIENT SERVICE MATRIX? PART ONE
  • ASK GERBER: THE HIRING PROCESS. WHY IS IT SO DAMN HARD?
  • ASK GERBER: WHY IT'S IMPORTANT TO KNOW AND GROW YOUR COMPANY CULTURE
  • ASK GERBER: HOW DO I ACHIEVE THE WORK/LIFE BALANCE AS A BUSY ENTREPRENEUR?
  • ASK GERBER: HOW DO I PREPARE MY FRIENDS FOR LIFE AS AN ENTREPRENEUR?
  • ASK GERBER: FIRST GENERATION ENTREPRENEURS AND BUSINESS EXECUTIVES, HOW ARE THEY DIFFERENT?
  • ASK GERBER: I PUT SO MUCH OF MYSELF INTO MY BUSINESS THAT I WORRY I AM FALLING SHORT AS A SPOUSE AND PARENT. WHAT CAN I DO?
  • ASK GERBER: ARE CHILDREN OF FIRST-GENERATION ENTREPRENEURS MORE LIKELY TO BE SPOILED?
  • ASK GERBER: WHAT'S YOUR STANCE ON REMOTE ACCESS FOR EMPLOYEES?
  • ASK GERBER: WHEN DO I NEED TO HIRE AN ADMINISTRATIVE ASSISTANT?
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