Why Now Is The Perfect Time to Exit Your Business
Exiting your business now makes sense for many business owners. Why wait?
The Platform 1 NZ Business Owner Succession Survey in April 2020 showed that 76% of business owners > 60 years old were looking at succession within the next 3-5 years and the pandemic had changed the succession thinking of 30% of business owners. We are now a year down the track and many of these business owners are still in a holding pattern and considering options. You are naturally thinking about when is the right time to exit.
This is another option you may not be aware of, that is well suited to the times we are in now.....
Now is the perfect time for a gradual exit through transitioning to a talented person with capital who can help grow your business as you exit. This person will acquire a percentage of your business at today's value and future tranches of equity at the value of the business at that time.
So why is now the perfect time to start a gradual sale process?
- There is a strong pool of talented people with capital, ready now to buy-in via this process
- Capital is abundant and has never been cheaper
- Waiting is a guessing game as well as being stressful, and none of us has a crystal ball
- You are not selling 100% of your business at today’s value and will benefit further as the business grows
The last year has been tough for many business owners and some complementary skills can help build back value. With the vaccine rollout underway, confidence is coming back and acting now can get you ahead of the curve.
If you were ready for a business exit before the pandemic, chances are your energy levels are not increasing and your succession need is not diminishing. You can start stepping back quicker than you think, reducing the time you spend both in and on the business and improving your wealth and lifestyle.
About the Author
Mike Warmington is a Director of Platform 1 NZ Ltd who specialise in using executive search techniques to find people with capability and capital for SME business owners wanting to transition.