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Business Transition or Financial Transaction?

  • Mar 04, 2022

There are a variety of reasons why you may consider exiting your business. From our experience it is often not all about a business owner just wanting to do a" financial transaction". Leaving a legacy is important to almost all the business owners we see whether they initially realise it or not. 

When and how to exit your business is an emotional decision with several variables in play:

  • What will you do if you exit the business completely ? You may want to play golf every day but does your Partner see it that way ? What shared interests do you have, or could you develop?
  • Do you have a passion you currently can’t commit enough time to, because of your business?
  • How can you mitigate the risk that whoever takes over your business will look after the business and your long term valued staff ? Is this important to you ?
  • The business is your reputation. If the service or  business viability start falling after you exit, could that reflect on you ?

A business can give you a sense of purpose and in many cases has been a key part of your life for so long. You have had a vested interest in its ongoing success.

Sometimes it’s hard to imagine not ‘being at work’. You’ve done that for decades.

Sometimes you have something you’d much rather do than 5 or 6 days a week at work.

Either way you can:

  • Stage your exit in a way that allows you to keep your hand in the parts of the business you enjoy, while developing new interests outside the business.
  • Ensure capability and compatibility is part of your new owner selection criteria. The person who takes over from you must share your values and be capable of keeping it successful and the staff motivated.
  • Stay financially in the business to reap the rewards of growth, but not need to attend – the timing is your choice.

Letting go is not easy but it’s inevitable. Better to  make sure it is a time of your choosing when you have a plan for what you’ll do next . No one likes an emergency fire sale of their years of hard work. 

Business Owner Transition is a method of exiting your private business, over time, to an external talented person with capital. This person works full-time in your business and buys you out over time to an agreed plan. You start stepping back by transitioning out of day-to-day management and transitioning into a new stage in your journey.

This may be the answer you have been searching for.

About the Author

Mike Warmington is a Director of Platform 1 NZ Ltd  - The New Zealand market leaders in business owner transition. Platform 1 specialises in using executive search techniques to find people with capability and capital for  business owners wanting to transition.  

 www.platform1.co.nz

 

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