Guest Column | July 1, 2016

Considering An Exit Strategy: A Business Legacy Conversation

By Arlin Sorensen, O and Founder of the Heartland Companies which includes HTG Peer Groups

We’ve been reviewing some of the information around business valuation and legacy.

Part of that includes evaluating how you begin planning for your exit from the business. It will happen someday.

This is one of those key areas that has to be thought of from a legacy mindset.  To exit a business well requires significant planning and often years of preparation to manage it well.

It isn’t something you should leave up to chance.  It begins with knowing the outcome you desire and are willing to prepare for.  Some options are much simpler than others.

There are a few key mindsets that determine which exit option makes the most sense for you:

  • Drain it – just take all the cash out of it you can and let it be a lifestyle business
  • Dump it – gut it and then sell what’s left
  • Grow it – work to build a long term sustainable company
  • Combine it – find another business to put it together with

And based on those high level options, here is a list of the most common approaches available to transfer value out of a business.  There may be more than you realize or thought:

  1. Liquidate the assets/business
  2. Sell to family members
  3. Sell to employees
  4. Sell to management team
  5. Sell to outside interest on the open market
  6. Sell to competitor
  7. Sell to strategic buyer
  8. Continue to run as an income stream
  9. Put into ESOP
  10. Die and allow family to inherit
  11. Do an IPO and go public
  12. Close and shut it down

Legacy, including exit, shouldn’t be an accident.  It needs to be planned and then managed carefully.

Being intentional is the proactive way to do all that you can to achieve the legacy that you dream about!

HTG Peer Groups exists to walk with leaders in life and business as they achieve their desired growth and legacy.  If you have gaps between your actual business value and what you need to retire, let HTG help.  Reach out to Dennis O’Connell to discuss how an HTG Coach or Consultant can help you close those gaps.