Several years ago, I was approached by a green industry business owner who asked me if I would broker the sale of her business. She had been running her business since high school and she was tired of the daily challenges. And she was excited about a new business idea that she wanted to pursue after her exit. In a surprisingly short time period, the sale of her business was completed. It was a cash transaction with no earn-out. She was free to pursue her new business idea with no restrictions.
A few months later, the seller called me and asked to have lunch. When we sat down, the first thing she said was, “I wish I had never sold my business.” I didn’t know what to say. I was completely caught off guard. We ordered lunch and talked it through. In a nutshell, she wasn’t ready to exit. She only thought she was ready because of her emotional state at the time. But she didn’t fully consider all of the implications.
It was an experience I’ll never forget because it opened my eyes to something beyond the transaction itself. Brokering a transaction may be financially lucrative for the broker but if the outcome results in regret, the deal was unsuccessful in my book. Business succession is only successful if all parties involved are in a better place afterward.
Are You Truly Ready to Exit?
When business owners are considering their exit, they should truly understand if they are ready. It’s often a tough question to answer without some guidance. And if there isn’t sufficient forethought, exiting may lead to regret. In fact, many successful business owners regret the way they exited their business because they weren’t ready. According to the Exit Planning Institute, 75% of business owners regret how they approached their exit.
So, what does it mean to be “ready?” Being ready to exit encompasses more than being emotionally ready. Being ready from a financial perspective involves having an understanding of tax implications, future financial needs, and the valuation of your business. Being ready involves preparing the organization for succession so that the business continues to operate smoothly under new leadership. And being ready requires a thoughtful plan for what the owner’s life looks like after exiting. Being ready means having a succession plan in place.
A Predictive Measure of Your Readiness to Exit
Thankfully, there are resources to help business owners discover how ready they are to exit. One of these is a free 12-question online assessment called Personal Readiness to Exit Score (PREScore). PREScore uses an exclusive algorithm, developed by analyzing more than 40,000 business owners and conducting mor then 200 in-depth interviews with owners who have recently sold to calculate an owner’s readiness based on four key drivers of a satisfying exit. Your customized free report provides insight into at-risk areas that are often overlooked and offers personalized recommendations for enhancing your succession plan.
I strongly encourage you to take eight minutes to obtain your PREScore for several reasons. First, it is free. There is no obligation. Just take the assessment and your customized report will be emailed to you. If you’d like to discuss the report with me, I’m happy to take time to do so but it’s not required.
Second, the report contains valuable information. The PRE-Score assessment helps you consider your level of preparedness so that you can exit with no regrets when you’re ready.
Third, the report provides insight into unseen factors that you may have overlooked. If not addressed, these factors may lead to regret and disappointment. By becoming aware of these considerations now, you will have time to address them.
Finally, you will receive a bonus: a free e-book called The Exit Checklist. This book provides you with a five-step personal action plan to guide you along your journey of exiting your business.
If you want to learn more about succession planning, register to watch the webinar recording instantly:
This article was originally published on Landscape Management and was republished with permission.