As the owner of the business, what are your options if you wish to phase out of the business? You could work to transition the business to your children. This is the wish and hope of many parents who have toiled for decades in creating and building and operating their successful business. This can be a viable option, if your children demonstrate interest in operating and owning the family business. What if this is not their destiny nor their wish? Many children, unfortunately, look upon the family business, not as an opportunity but as a burden and a yoke.
Then the other options include:
1. management buyout (MBO)
2. sale to a third party
In either of these cases, the best thing that you could and should do is prepare and plan. The preparation for this can often take 5+ years to put into effect. With sufficient time, you could implement not only the documentation of the operation of the business, but you also could ensure that you have adequately put in place knowledgeable third party (trusted) management to operate the business, so that if you were not there, the business could profitably continue and survive. More about this documentation of your business’ operations in a other blog posts. The critical part about putting in place management is to share your special knowledge, the secret sauce of your business, about how and more importantly why
the business operates successfully.
As stated by one wise person, beginning the planning to sell your business (whenever that may be) will help you ensure that the structure of the business and decisions made will be appropriate to maximize the exit value of your business.
Take time out to think about your strategy for where you will be in 5+ and maybe 10+ years and start to make plans accordingly.
Learn, think, apply!