E-mail this page to a Friend!
Bookmark this page!
Developing A Business Exit Strategy: How to get the most for your business when you leave.
Summer 2017

SEASONAL
Annual Events
Attractions
Boats & Marine
Bridal & Tuxedos
Campgrounds
Farm Stands, Markets
Garden Centers
Golf Courses
Ice Cream Stands
Lawns & Landscaping
Pool Contractors
Rides & Tours
Summer Camps
Wedding Resources
Used Car Dealers

REGULAR
 NHCabins&Cottages
About Us
Advertisers
Apartments for Rent
Arts, Museums & Music
Bed & Breakfasts
Bridal & Tuxedos
Cabins & Cottages
Car Dealers
Florists
Furniture
Get A Web Site
Gun Shops
Kid's Page
List Your Site
Lodging
Malls & Shopping
Movie Theaters
Painters 
Photo Gallery
Real Estate Agents
Recreation/Attractions

Reference Desk
Restaurants
Terms of Use
Tourist Helps
UpstateNH
Video For Your Site
Web Site Optimization

Search Directory NH

    
Resources

NH Cities & Towns
NH City & Town Clerks
NH Photo Gallery
Other NH Sites

Search Tips
Links

NH Cabins & Cottages
NH Foliage Report
NH Lottery
NH Movie Guide
NH Photo Gallery
NH Ski Reports

NH State Parks
NH Weather
Recreation NH
Wedding Planner

Developing A Business Exit Strategy
How To Get The Most For Your Labors When You Leave!

by Therese Reger

If you have a business, you've probably heard the term 'exit strategy'. No, this doesn't refer to your last will and testament. Rather, it's long-term thinking about how your involvement with your business will end.

Ideally, most business owners would like to build equity and cash out eventually. This raises some issues: Will this business be worth something to someone besides me? What will constitute the assets? What is the minimum size that is considered salable?

First, can you show a profit? It's a truism that nobody will pay for potential. You may see only blue skies ahead, but you will need a track record of earnings and profits before a buyer will agree to plunk down cash for it.

Some businesses' only real asset is the owner. If, for instance, you've built a nice little income from doing magic shows, good luck selling out. Once the magician - that would be you - disappears, poof! The business evaporates.

That may be a fanciful example, but it holds true for sole proprietorships such as one-person accounting firms, or landscape designers. Unless you can assure a buyer that your customers will be as loyal to him or her as they have been to you, you don't have a salable property.

The time to start exit planning is the day you start your business, says Jay Polimeno, CBI, a business broker in North Woodstock, N.H. [www.polimenobusinesssales.com]

"A business owner needs to prepare years in advance," says Polimeno. He ticks off some items to be considered in the planning process:
  • Active marketing and sales to build the business

  • Creating an employee culture which will easily transfer to a new owner

  • Accurate accounting of revenues and expenses so that everything can be justified to a potential buyer

  • Acquisition of real estate assets if possible or at least a very solid lease if your business is renting space

  • A full understanding of Seller's Discretionary Earnings - i.e., the 'cash flow' of the business to the owner

  • Last and more personally, an idea of what the business owner will do once the business is sold: sign a non-compete and retire? continue to work for the new buyer? open up another business? spend time with the kids or grandkids?
  • Selling is not the only possibility. You may decide early on that you would like to leave the business to your kids. (Better make sure they agree with that idea!) Or you may conclude there's more value in liquidation. Creative thinking is in order. If you own a widget factory on a hilltop, you may want to approach a real estate developer.

    Successful selling usually also means getting out while the going is good. Don't wait until the economy or changes in technology gives you a string of bad quarters. While you may not want to sell when things are going great guns, that is the prime time to polish the business and put it on the market. Another advantage to selling during good times: A buyer is more likely to find lenders. And since most buyers do not approach you with their hands full of cash, the availability of financing will determine how much you can get in a sale.

    Ultimately, you have only so much control over the fate of your business. But it pays to start the planning process before you start feeling pressure to sell. In that case, the phrase 'exit strategy' will tend to take on shades of terminal despair.




    Reprinted With Permission: from UpStateNH.com

    Page: 2003-B