EP 3: Are you ready to exit? This self assessment can tell you.

Unknown Speaker  0:00  
Today 80% of businesses don't sell to be a part of the 20% that do and at maximum value, you'll need a successful strategy. Welcome to the defenders of business value podcast where we interview today's top professional advisors who help business owners create, preserve, and most importantly, transfer value. If you want actionable tips that will increase your business value. Stay tuned,

Ed Mysogland  0:25  
the podcast starts now. Welcome to the defenders of business value podcast. I'm your host, Ed Mysogland. And I teach business owners how to identify and remove risks in their companies so that they can sell for maximum value when they want how they want and to whom they want. So today, you just get me. And we're going to talk about the emotional side of selling a company, there was a study done by the Exit Planning Institute. And they identified that 75% of business owners that sold their company that again, back to if you can sell your company, those that did 75% of them regretted selling, and only 5% were happy with the proceeds that they received from the sale. So if you do a little bit deeper dive that that original study came from Price Waterhouse Coopers and the biggest challenge or the background, but behind the disappointment in the sale had to do with three things. The first one is did they time the market. Second, did they get the value that they wanted. And third, that they didn't know all of the various transfer options available. So let's dive a little bit deeper into this. So we know that there are four drivers to a successful exit. The first component of a successful exit is that they're able to retire to something. So they they can envision what their life looks like without their business. And it's a challenge for a lot of business owners because they've slept, ate and breathed the business for a long time. And the idea of not going to work every day or not thinking about the business is difficult. So that's why you're seeing so many 70 year old plus business owners, because they're sitting there saying well, why would I possibly get out of the business? I'm if I'm relevant. If I'm capable, I'm physically healthy, why would I leave, the business owner needs to be in a position to retire to something. The next area is that the business owner needs to be flexible in their exit, meaning that there are a variety of of transfer channels, meaning that you can sell to a third party you can sell to management you can have an ESOP or an employee stock ownership plan, and various other options to exit the business, as well as the business owner is probably going to be required to remain in some sort of capacity to train and transition the next owner. So understanding while you are going to sell the company, you're still going to probably be affiliated in some capacity for a short period. The third area of a successful exit is the personal detachment. And like the future vision of a life without the business, the detachment is something a little bit different. Whereas Can you envision yourself without the business, there is a certain level of ego that accompanies being a small business owner or being an owner period. And at some point, the business owner has to reconcile with themselves that they are not just identified by being a business owner. And so that is one of the challenges that a lot of business owners face is that their identity is wrapped up in the business. The last step to a successful exit is having a good team around you. And this team could be a variety of different people. I mean, certainly accountants, attorneys, coaches, spouses, deal guides or investment bankers or business brokers. The business owner needs to align herself with those types of advisors to get ideal guidance on these next steps and being able to share his or her own vision of what their retirement looks like they can by using these advisors, they can all align and get The optimal exit for the business owner. So how do you know whether you're ready to exit emotionally? Well, there is a self assessment called pre score. And I'll have a link to it in the show notes. But it's, like I said, a self assessment that takes roughly five minutes to do and it will help you identify whether or not you're ready to exit. And there really is no right answer. But it is important for you to recognize this component of exiting a business, it is not just the X's and O's, it is far more than that. And probably I and I would argue that it's probably more important than the X's and O's is that you probably have a third of your life remaining. And getting the exit right is important for you to to have your post business life to be optimal. What you envision, again, the so there is a complimentary self assessment that is on the website, defenders business value, or you can go to the show notes, and select the link. And we will be more than happy to get you a report to kind of help you gauge where you're at in the process. Thanks so much. See you next week. Thank you for joining us today on the defenders of business value podcast. If you're preparing your business for sale now or in the future, visit www dot value builders.us To begin your journey to maximum saleable value. And if you want more episodes jam packed with strategies to maximize value of your business, visit defenders of business value.com better yet subscribe now so you don't ever miss an episode. This program is copyrighted micelle incorporated all rights reserved.