Whether you plan to sell to an outside buyer, pass the torch to a family member, or transition ownership to a longtime employee, you will eventually move on from the day to day operations of your asset.
In my experience as a broker, I frequently hear from owners who want to exit immediately. While they feel they’ve reached the perfect moment because they are personally finished, the reality is quite the opposite. If you wait until you are ready to walk out the door to start planning, you’ve already lost your leverage. Exhaustion and impatience are poor negotiators. The most strategic time to exit is while your business is thriving and you still have the energy to command its value.
A truly successful transition is not something you pull off in a few months. It is a strategic process that ideally starts one to three years before you ever plan to sign the final papers. You have to account for market cycles that you cannot control, and you need time to clean up your books so you are handing over a well oiled machine.
If you are passing the business to an heir or an employee, they also need time to be mentored into the role. If you are selling to a third party, they need to see that the business can thrive without you being there every single hour of the day.
By the time you are actually ready to step back, the foundation should already be set. If you are starting to look at that one to three year horizon, let’s talk. It is never too early to get your ducks in a row.
