I was recently having a conversation with a reporter where I was asked the question, “why do most business owners who sell their business end up leaving shortly after they sell?” My answer was they don’t realize what they’re getting into and once they’ve sold the selling owners often don’t like what they find.
Having a stay bonus in place, especially if the business owner is over 50 years old, is an important part of making sure key managers stay with the business if something happens to the business owner.
They are not especially interested in buying a business that depends on your skills at working with Clients, managing money, or having specialized knowledge. It’s not that these things aren’t valuable; it’s just not very valuable to a buyer of your firm.
A potential buyer of your firm will love an ensemble practice that really is an ensemble. If you’re running a solo firm or a group solo practice buyers are not going to love your firm or pay you big money for it. If you can find some way to change your firm to an ensemble practice the enterprise value of the firm will dramatically improve.
Business owners who are over fifty years old are often interested to learn about options they have for leaving their business. They often want to know what steps they should take and to learn what the best steps are for them to take.
At some point you’re going to leave your business. Hopefully when you leave it’ll be on your terms. Understanding your options well before the day you leave your business is just good planning and good planning always helps you get a better outcome.