Private business exit - 16 questions to develop a plan

Yesterday I wrote about some possible challenges for owners of established mid-size businesses who want to exit their investment. In an occasional series, I’ll cover how to address those challenges. I’ll be drawing on my experience of being involved as a CEO, owner, director and/or adviser of mid-size businesses undergoing or thinking about ownership change, as well as having been involved in pre- and post-deal situations on both the buying and selling side (mid-size and large size).

Your exit might be many years away, but it’s never too soon to start planning for it. These are some questions I’d be exploring with you:

1. Why are you selling?
2. What exactly does your business offer the world?
3. What are your goals and dreams - inside the business, outside the business and after the business?
4. How attractive is your business, and what’s wrong with it?
5. Who are your key people, customers, suppliers and partners, and are you vulnerable to their departure?
6. How do you make yourself unnecessary to the business?
7. Which buyer types should you target?
8. Who would want to buy it and why; who should, but doesn’t, and why not?
9. Should you sell gradually or all at once?
10. Should you sell to family and/or staff?
11. What should you do to improve your business attractiveness?
12. What should you do to be ready for sale?
13. How do you manage the sale process? Part I, Part II
14. What’s in a good sale agreement for you, and for your buyer?
15. How do you ensure a successful transfer?
16. How much should you be involved after the deal is done?

The best way to have a great business to sell is to have a great business. Actions you’d do to prepare your business for sale are often actions you should do anyway. The answers to these questions and the ensuing discussion will help you formulate a business plan with successful exit in mind. I’ll be addressing each of them over the next few months.

First posted June 24th, 2008