Challenges for Women Business Owners: Guidance from NAWBO-Cleveland Past Presidents
Credit: Insights, advice and real life experience share by NAWBO Cleveland's Past Presidents

The Business Challenge: Planning Your Exit

You have a maturing business and you can see your future exit from the business on the horizon. How do you do it successfully – and do it on your own terms?

Planning Considerations:

• You need an intentional plan to achieve your goals and make the most of your investment in the business. Determine your objectives and timeframe and plan accordingly.
• Determine the amount of money you want or need from the sale of the business.
• Maximize the value of your business to prepare it for eventual sale.
  • Be prepared to make some hard decisions, including decisions that impact your team.
  • Recognize that you may need some time to execute the actions needed.
• Think about all the options, such as:
  • Selling the business to a partner;
  • Selling the business to your employees (Evergreen Cooperative is a potential resource for this);
  • Selling the business to a customer or supplier;
  • Merging your business with a comparable firm in a transaction that enables you to eventually exit and ensure your customers are properly serviced;
  • Phasing out more slowly: Reducing operations at some level such as working only a few days a week, offering only some services, working with only a few select customers:
    • If you do this, choose the customers you enjoy working with the most and/or that generate the most profit.
  • As you approach the exit, be sure to plan time for the due diligence required for whatever business transaction will occur and for working closely with the future owner(s) to ensure a smooth transition.
  • Prepare for the tax consequences of a potential exit or sale.

 

Signs It Might be Time:

• Your equipment is becoming obsolete and/or a big investment in equipment/capabilities will be needed to keep the business going and growing.
• Your profession or industry is changing in a major way that will require you to revamp the business for continued success.
• Critical software you use to run your business is about to change dramatically, requiring you to invest major learning time.
• A key staff member/partner/supplier who is essential to the business calls it quits, forcing you to find a new resource.
• It’s not fun anymore. You don’t look forward to being at work or enjoy doing the work.
• You have other priorities for spending your time, such as travel, family, nonprofit or civic engagement, art or other creative pursuits.
• You’ve had or are approaching a major life change that will impact the role of the business in your life.
• You are financially prepared to live your life as you’d like without the income from the business.

 

Tips for Success:

• Start now, before you need to go.
• Look at the decision as an opportunity to pivot – to do something you want to do (ideally using the skills and knowledge you’ve developed in your profession and as business owner) in a different way.
• Plan for the unexpected: Loss of a business partner or spouse, loss of a big customer, changes in your own health or financial situation.
• Make sure you are leaving your customers in good hands and that they are fully covered with a new supplier or resource.
• Know what you’re exiting to: How you will spend your time and your life when you’re no longer doing the business every day.
• Consider staying engaged in your professional associations, such as NAWBO, to maintain long-term relationships and keep up on your field.
• Remember that life is short.