Business owners know they cannot maintain ownership forever. The timing and rationale behind ownership changes differ from owner to owner and determining the optimum timing can be tricky. Implementing an exit plan can be daunting so it’s important to recognize key indicators that may signal the timing is right for you and for your business.
First, personal desires and demands may often be the catalyst behind ownership transitions. Maybe you’re getting older and do not have the motivation to take the business through the next stage of growth? Perhaps your health or a loved one’s health is declining? For many business owners, their company has been the fruit of their entire professional life. Their hearts and souls have been poured into the Company. To protect the legacy of the business, a business owner may plan to keep ownership within the family so, it’s a natural progression when the next generation comes of age and experience to transition ownership and leadership. Other times, a health crisis may accelerate a business owner’s need to transition the business. Either way, advancing age and health are primary reasons business owners consider transitioning. So, it’s important to be prepared and have an exit plan in place for when the time comes.
In addition, whether positive or negative, financial considerations may drive ownership transitions. Perhaps due to the loss of a key client or other factor, a business may find itself in financial distress and ownership may determine selling the company or bringing in investors is the best option to salvage value. Or, perhaps the Company is performing very well, and growth opportunities are clear. In this scenario, ownership may look to sell a portion or all the company and enjoy the fruits of their labor. Selling your company while it is performing well is the optimum time for you to receive maximum value.
Finally, the state of the market can play a significant role in ownership transition. If a company is in a growing industry, the M & A market is acquisitive in the sector, and the economy is stable, it may be the ideal time for a business owner to transition the business. In summation, at Aberdeen, we often advise clients, if you are ready, if your business is ready, and if the market is ready, it’s the perfect time to transition!
Aberdeen Advisors, a boutique mergers and acquisitions firm, has seen all these scenarios. Our dedicated team is committed to helping business owners successfully navigate the intricacies of an ownership transition. Our team is made up of former business owners and C-suite executives who have run and sold companies. We pride ourselves on a successful track record of shepherding business owners through the process to ensure a successful outcome.