Option #1
Close it down and liquidate.
This is the simplest option. The goal is to find a home for your Employees and Customers. Many business Owners may eventually take this option, if they are not prepared for options 2, 3 or 4 discussed below. Oftentimes a business is not sale-able due to the fact that as the Owner … you ARE the business. It doesn’t have to be this way with planning and preparation!!
This simple option will take a minimum of 12 months to close properly.
Option #2
Transition to a family member or key employee.
Over 70% of my coaching clients over the past 14+ years have been legacy Clients. These are Clients where the Owner utilizes coaching for a number of years to ensure the next generation is ready to lead and will not put your business in a ditch. Using coaching to validate that they are ready and able to not only sustain, but to grow what you have built.
This option usually takes 2-5 years.
Option #3
Sell to internal employees.
Evaluating all of your options to sell the business to your current employees, either via a stock transfer or through an “earn out,” takes years to develop and ensure the business will thrive and survive. Is an ESOP the answer?
This option usually takes 18 months to 3 years to complete.
Option #4
Sell outright to a third party.
Only about 1 in 20 small to medium sized businesses will be sold via commercial sale. Very few businesses are “saleable” in their current form at a price that is close to the value the business Owner expects. Good brokers will only list the business for what they truly believe they can sell it for in 12 months or less. As many of the Boomer generation prepares to exit, the market will be decidedly a buyers’ market and only the best prepared companies will be purchased.
Expect 1-2 years to prep, market and sell the business.