Who’s the Boss: Choosing the Right Successor for Your Business
M&A activity has been booming over the past couple years. The economy continues improving, and many people who delayed exiting their businesses years ago due to the recession are finally taking the leap. Many of these are baby boomers wanting to finally retire.
However, many are concerned about what will happen once they exit the business. Closing the business down altogether, passing it on to a family member or selling it to an interested buyer are all options, but there is not a one-size-fits-all solution.
After running a successful business for many years, closing it down altogether could seem like the most disappointing option of all. While this can be the right choice in certain situations, some business owners feel like it is the only option. After someone has taken the time to grow and build the business from the ground up, the last thing they often want to do is have to close up shop and leave loyal customers disappointed.
Many business owners intend to pass the business on to children or other family members. While these successors may have long been involved in the business, whether that be working there while growing up, or taking on a management role as they got older, this does not mean they’re the right option. Often, family members of successful business owners want to take a different path, and they are not as passionate about the business as the owners before them. Although many owners want to keep the future of the business “in the family,” it must go to the right person, not just the most convenient one.
When owners determine they do not want to close and do not want to pass the business on, one viable option left is to sell the business. This can be a scary thought for many owners, as they often fear leaving their hard work in someone else’s hands. However, there are many interested and qualified buyers out there that would do a great job running the business. Finding those buyers is the tricky part. Working with a mergers and acquisitions specialist will help to achieve a good deal and a smooth transition. They’ll assist in valuations, finding buyers and doing their due diligence. They’re also somewhat of a hand holder for those selling a business for the first time, who likely have many questions and concerns.
The important factor to remember is finding the right people to continue driving the ship. Whether that be family members or a new buyer, transitioning out of the business owner role can be stressful. By taking the time to consider all of the options or consult with an M&A advisor, owners can feel more confident and assured that their business is being put in the right hands.
Kevin L. Ramsier is Managing Partner and CEO of Vesticor Advisors, a national mergers and acquisitions advisory firm that helps business owners prepare their businesses for maximum value. He has built and exited four successful businesses, and has appeared on INC Magazine’s list of fastest growing private companies two years in a row.
If you want more information on what you should do before selling your company, visit our website at www.vesticor.com. For a free copy of our book, Don’t Sell Your Business Yet, you can go to www.dontsellyet.net and download your complimentary copy.