|The only way to eliminate the risks inherent to owning a closely held business interest is to sell it - for cash. Doing so not only takes chips off the table by converting an illiquid asset to cash, but it also allows you to eliminate personal guarantees, reduce liability exposure and remove personal collateral (used for business purposes) that was at risk.
No Fire in the Belly
Few owners reading this newsletter are as energetic and enthusiastic about their businesses as they were when they started (or even during the middle years of the business). Owners tend to continue in business beyond an optimum departure date because they don't know what else to do with their time. They continue on and spend months or years in their businesses long after the passion has died.
First, once lost, owners typically don't regain their enthusiasm for, excitement about, or enjoyment of their businesses. The reason is pretty straightforward - entrepreneurs like to create. Once a business has a life of its own, it is left to wreak havoc or to succeed. Making money and all of the other by-products of a successful business are nice, but it is the act of creating, of successfully meeting the challenges, that brings satisfaction to the entrepreneur. The fire in the belly is the passion that gives birth to and nurtures your business. Once the business is on its own, once it no longer needs you, it may be time to move on to the next challenge, the next call for your passion and creativity. It is at this point that many owners begin searching for the exit door in order to find the next passion.
Second, one of the few solutions to the loss of fire is to sell the business and get out. Your business will move to the next level under new ownership for whom moving to the next level provides ample stimulation and challenge.
If one, or both, of these personal motives resonate with you, then the time may be now to call our office to discuss the path that needs to be taken to prepare your business for your eventual exit. We can help guide you through the process of reviewing all of the factors associated with exiting your business and creating a comprehensive Exit Plan that addresses all of your personal and business objectives.