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Recently I was at a program sponsored by The Sudden Money Institute called Inward Bound. This is one of the programs I do to stay current and be a useful Financial Transitionists.TM
During the program, I had a thought about a role I need to play with people who are thinking about or are in the process of transitioning out of their business. This is a role that no one talks about because almost no one knows it’s even a possibility. This role is one where I help you guide you through the process of leaving your business.
The reason I think this role is so important is very easy…….there is no one who just works for you and doesn’t have a major conflict of interest. Let’s look at the group of people who you might be serving you:
- The M&A professional – A really important team member and they’re interest is seeing you sell your business. That’s when the big payday comes in the form of a success fee.
- The transaction attorney – There is a big incentive for them to get a deal done. They get paid to put together closing paperwork.
- Your accountant – This is where it gets confusing. Your accountant actually has a negative incentive for you to sell your business. If you do, most of the time they will lose your company as a client.
- Your personal lawyer – This professional has the same problem your accountant has. If you sell your business, they will likely lose you as a client because your need for legal work will significantly be reduced.
The truth is almost everyone in this group and more either has a negative or positive financial result if you sell your business. It’s important that you know what that interest is.
My role as a Financial TransitionistTM who helps you think through and execute on the process is the only one that really doesn’t have a financial interest in whether the transactions goes through or not. My role is to help you get your business ready for sale and then guide you through the process.
Here are some things a Financial TransitionistTM who also has significant training in the exit planning process does:
- Help you think through whether selling your business is the right thing to do.
- Help you evaluate your business and understand what needs to be done before you start the sales process.
- Look at the value drivers in your business and help you decide which items you should work to improve and which you should manage.
- Help you choose the right team to get you through the sales process.
- Work with you to become operationally irrelevant in your business.
- Guide you through the process of doing trial runs where you aren’t involved in the day-to-day operation of your business and spend extended time completely away from your business. (This is the only way I know that you can avoid getting sellers remorse.)
- Make sure you’re financially able to leave your business and come up with a strategy to get you to this point if you’re not.
- Guide you through the due diligence process. For most first time buyers, this is where the transaction falls apart.
- Help you think about your financial needs and help you understand where your future cash flow comes from.
- Most importantly, help you keep your eye on the goals you establish. There are times where it’s best to take your business off the market and start over. A well trained Financial TransitionistTM can help here because they are working for you and not the deal.
If you’re even thinking about selling your business, you need to spend a free 30 minutes talking with Josh about your thoughts. It’s a free call and all you have to do is click here to choose a date and time that works for you.
This is what I’ve been thinking about when it comes to leaving your business. It’s also the type of person I wish who existed when I was selling my vending company.
Let’s face it, selling your business is hard work. Most people who will work with you will have a conflict of interest that’s pretty significant. You’re likely only going to do this once or twice in your life. You want to make sure you get it right.
Leaving your business is harder than you thought.
Before you think about selling your business, you need to know where you are on the road to financial independence. Get our free course on what you need to do to leave your business in a way that will allow you the freedom and financial security you want.