- Passing the business to the team in existence,
- Selling and walking away,
- Merging with or being taken over by another company.
After this determination is made, Kohl advises there are specific steps that need to be taken. “If leaving the business to the team in place, the owner needs a solid secession plan and they should spend time bringing the team fully up to speed.”
“If selling, many conversations need to be had with the new owner detailing what they will do with the management team and the timing of the transition period,” Kohl suggests. He also says another important discussion is the one between the selling and future owner(s) about whether to keep the current owner on for a consulting period.
In the situation of a merger or takeover, Kohl advises there will be another operating arm and the owner will have to work through the redundancies, “Additionally, emotions are likely to run high as there won’t be a job left for everyone. The owner should be prepared to address those concerns thoughtfully and honestly.”
Once the owner is clear on the direction for their business, there are many other things to consider:
- Company valuation – “I advise owners to be realistic when valuing their company. Just as you often see on “Shark Tank,” future projections don’t matter. Have a valuation in mind and have discussions with brokers to see if it’s a solid figure,” suggests Kohl, who says valuations can be set fairly quickly when strong financials are present.
- Speaking of which, the owner must work through their terms with the financial team and check their ego at the door. “When it comes to selling, merging or a takeover, no one cares how much work you put in. It comes down to hard numbers. If you are someone who can’t monitor their emotions and be realistic, it’s vital to have an expert go through this process with you,” adds Kohl.
- Have an exit strategy in mind from day one. Kohl recommends, “You don’t know when someone is going to walk through the front door and offer you money. There should be an exit strategy in mind from the day you start.”
About BBSI – BBSI, a long-standing, leading provider of business management solutions, is new to Las Vegas. BBSI will help businesses of all sizes in the Las Vegas market improve the efficiency of their operations. With 101 teams in 58 physical locations, BBSI partners with businesses to develop a blueprint for success that includes important areas such as human resources, payroll and risk management, as well as business management coaching.