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Exit Strategy: Selling the Company - Coggle Diagram
Exit Strategy: Selling the Company
Benefits
Be able to secure money quickly
The sell will allow me to receive the money immediately or over time
This would be especially helpful if I needed to secure cash quick for an emergency or unexpected life event
One of the best reasons to sell, you get to receive the money and no longer have to deal with the stress of the business
Be completely free of the business, no more stress
Being able to stop being apart of the business will allow me to have more time for myself
This will let me reap the benefits of my hard work in creating the business
Let the new owner run the business they want to so there's no arguments or bumping heads
Go into retirement with no strings attached and money
Not having to deal with other owners, or employees, I'd be able to do what I want and not deal with people
Description
Selling involves giving full ownership of the business to another person in exchange for money or asset, etc
Receiving money in exchange is great because it's a lump sum received that you can spend however you want
I would use the money for retirement or to start another business depending on the reason for the exit
This is a good option if there is a need for money quickly or the business is becoming too overwhelming
No longer being involved in the business, and having no percentage of the business to make decisions
This allows you to relax and no have to constantly be on call for the business, just reap the benefits with the money and pass the baton to someone else
You won't be involved with the business at all, so you built this up but now giving it to somebody else and hope they love it as much as you do
Why?
Many potential reasons
Need money
There could be a chance something like a pandemic could hit again, so deciding to sell for the money is the best option
But, with the pandemic, nobody was buying businesses really so it'd be hard to find a buyer
Needing to buy a house or other asset would be a big reason for selling in this situation
Too much stress
Owning a business means that everything's up to you and it may just become too much
Hiring employees
Making decisions
Money
Customer complaints
Relocating
My husband works for the railroad so there's a chance we may have to move one day
If we had to move, an easy option would be to sell so I don't have to start over in a new location
This also is good for my customers because I wouldn't be leaving them hanging dry, but I'd leaving them the business with a new owner
No longer a passion
Although dogs are a passion of mine, I know there may be a day that I want to move onto a different business and focus on something else
This is a great option so I can just quietly move on and start a new business with the money or just hold the money and use it for retirement
Business failing
There's always a possibility that the business won't catch fire and it may be because of me
It doesn't mean the business isn't a good business, it's just that I'm not the right person to run it
If I can't secure customers, it may be time to sell it to somebody who can
Potential Risks
May take awhile to find right buyer
I would want to sell it to someone I trust
This could take a lot longer to secure a buyer because people I trust may not be interested
It would be hard to get family to pay the right money because they'd feel like they deserve a discount possibly for being family
Preferably sell to a family member or somebody I already know
This may result in issues because of finding the right price, and the right person to buy the company
Wanting a specific person to buy the company means that I might not be able to sell the company at all because I won't be able to find someone I trust 100%
Employees may lose jobs, or not work well under new management
The new owner may want to start from scratch and fire all existing employees
The new owner may change rules and policies that the employees don't agree with as it's a change
Employees may not want to adapt to the new ways of training that the new owner may implement
Legal costs to sell
The flat rate for the attorney, if one is hired can start between $1,000 - $2,500
More money may be spent in negotiating, and trying to reach a final price