What all business owners need is a strategy for how you are going to exit your business. The strategy needs to start with what we call your “magic number”. This is the amount, net of tax, that you want when you step away from the control of your company.
You may want the help of a financial planner to come up with that number. You need to work back from this number to determine, on a realistic basis (with the benefit of professional advice from some experienced in selling companies), what you need to do to build value and realise value in your company.
Often the key is to create alignment between you and the key team members you have brought together to run your company with you. You need objective independent advice. You also need to know the range of alternatives. For some owners it be that you need to plan for the closure of your business. Others need to consider whether your management team might be a credible buyer. The fact that they cannot raise independent finance need not be a problem. It may be that you can be the funder of a buy out by them.
Alternatively, you may be able to sell your business to a trade buyer but will need to motivate your team to help you do that by awarding them share incentives or options.
