As we introduced to you in the last Exit Planning Navigator® newsletter, the common objections that tend to hold back owners from selling their businesses are usually based upon some combination of the following:
- The business isn't worth enough to meet my financial needs.
- The employees (or customers) will leave when they discover I'm trying to sell.
- I will be required to work years for a new owner.
- The sale process will take too long and cost too much.
- Given the tax bite on sale proceeds, it makes more sense to stay, enjoy the cash flow and get paid over time.
- What will I do after I sell and leave the business? This business is my life!
We previously looked at the first two common objections that can influence your timing on selling your business - determining business value and losing employees or customers before you sell. We will follow up on this discussion by looking at the remaining common objections that can affect your decision to cash out of your business and move on to the next stage of your life.
I Will Be Required To Work Years For A New Owner
If one of your Exit Objectives is to leave the business as soon as possible, it is important to make that objective known to your Exit Planning Professional and it will be a prerequisite of any sale. That objective will determine which type of buyer you should seek. There are categories of buyers who typically do not require the former owner to remain with the company beyond a short transition time period - usually no more than a few months - provided your management team is strong.
The Sale Process Will Take Too Long And Cost Too Much
Cost, of course, is a matter of perspective. But the only way for you to make the determination whether the sale process is too expensive or not is to discuss costs and expenses with your advisors before you hire them. It usually takes from six to eighteen months to sell your business. The more you know, the better prepared your company can be for sale. Better preparation on your part can mean less time and expense on the part of your advisors.