Exit value and the multiples are the way to judge success. What else matters?
Ignoring two other critical factors could lead to lifelong regret…
When discussing sales, it frequently revolves around a number in dollars or “the multiple”. This is important, but if 76% of former owners regret selling, there is more to consider than getting the return you deserve. Two additional critical factors for a successful exit are control and legacy.
🔑Control over the terms of your exit
Control over the terms of separation is critical for many buyers. Once they make the tough choice of parting with what they invested a significant amount of their lives in, they want to move on with a clean break. The thought of working for someone else (especially in what was their business) or adjusting to the change of status is unpleasant.
This isn’t always the case. Some owners are excited to relieve themselves of the stress and focus on doing what they love. It does, however, require careful negotiation, best documented to ensure both parties fully understand what the future will look like.
❌ “Nope, this doesn’t apply, we are a family business…”
If you feel that this doesn’t apply as you are planning to transfer your business to your family, please think again! To preserve your legacy, you need to consider how you will cope with changes in your control over the business. This requires a rock-solid understanding between you and your children over how your roles, responsibilities, and level of engagement will change.
Planning is critical
💡Planning your exit years in advance can significantly impact your options, value, and whether you feel success or regret. This is true whether you intend to pass it to the next generation, reinvest it, or fund your retirement.
Ready to find out more?
Next week, we will look at the other critical factor, which might be the most important: Legacy.
Don’t be one of the 76% of former owners who regret their sale.