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Mistake #1 - Not
considering all options
Most business owners
don't realize that there are many possible ways to leave their
business. Thinking too narrowly, and not considering all of their
options, is a common and sometimes costly mistake.
Initially, the owner
might consider three basic approaches. When he's ready to leave the
business, he could (1) sell to a third party, (2) give the business to
his children, or (3) liquidate the business.
Many businesses we work
with have between 10 and 100 employees. For a business in that size
range, about 60% of the businesses are eventually sold, 30% are given
to the owner's children, and 10% are liquidated.
In our work with
business owners we have expanded these three basic approaches into
fifteen different ways to leave your business. Each of the fifteen
ways is good in some situations but not in others. To avoid thinking
too narrowly - not considering all options - we review each of these
15 approaches before selecting the strategy that is the best fit with
the condition of the business and the personal financial goals of the
owner.
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