When Should You Buy or Sell a Business

If you are a business owner today, inevitably there will be a day in the future when you no longer
own that business.

One of 3 things will definitely occur:
1) You may transfer ownership of your business to family members or employees
2) You may sell the business, or
3) You may go out of business.

Sadly today, a great number of businesses go out of business. They close down. Jobs are lost.
Dreams are dashed.

Of course, no one plans to fail. The Small Business Administration reports that over 60% of all
businesses in America are small businesses employing 4 employees or less. The SBA also reports
that only 1 out of 4 of these businesses are eventually sold or transferred. This doesn't necessarily
mean these were either bad businesses or these were poorly managed. Experience says otherwise.
In many cases, it was a result of a failure to plan for the inevitable.

Therefore, the success of this eventual transfer of ownership is totally dependent on what steps
you, the business owner, take to make the transition successful.

There are 5 keys to creating a successful transition plan. The first is recognizing that this transition
will inevitably occur, and then deciding whether you will be transferring ownership to family or
employees, or if you will be selling the business. Secondly, setting your criteria under which you will
sell. Third, prepare the business to sell. Fourthly, prepare an exit strategy for your self. And last, and
most importantly, maintaining confidentiality throughout the process. After working through each of
these steps, a business owner is in a much stronger position to begin the process of selling the
business.

It may be many years before this transition takes place. And yet, there is never a time when you
should not be aware of your plan and have the components actively in place. Optimally, there will be
a time in the future when business conditions are perfect for you to sell. The economy will be
soaring, interest rates will be low, there will plenty of demand for your products and services and
potential buyers will be abundant. But, if you haven't already committed yourself to a transition plan,
you probably wouldn't sell at that time-you will be too busy to think about it, you will get to it later,
maybe things will get even better. And the opportunity perhaps will pass, maybe never to re-appear.

This is why what you do now is so important. Creating a plan and putting the components in place.
It's long been said that if we want to be successful, look at what everyone else is doing, and then do
something else. Most people do not plan.

Making a plan is the first step towards success.

Please contact Stu to further discuss how to plan for successful business transitions. He can
provide additional information about how to properly execute a business transition plan once it has
been created. Stu can also help you buy and sell businesses and feels that the best time to buy or
sell a business is when the owner or potential owner is best prepared to buy or sell.