Time to Exit Your Business? Case Studies of 3 Women Entrepreneurs


Women are great leaders

Can You Exit Your Business and Extract the Business Value?

Have you founded your own family business, nurtured it from a startup to a successful business for the last 25/30 years? Now as you approach retirement, you want to extract the value, rather than just shut it down and walk away.  Or perhaps you have just run your business for 10 to 15 years and it’s time to move on.  You can orchestrate how you exit your business if you make a plan.

3 KEY FACTORS TO CONSIDER

1)  Plan Ahead

Don’t wait until the last minute, when perhaps your business is getting tired, or you are getting tired and you just want out.   Have a succession plan devised at least 5 years before you trigger the event.   This gives you enough time to organize a smooth transition

2)  Clean Up Before You Exit Your Business

Get your business in order.   Pay attention to both your receivables and payables.   Make sure you have good systems in place, job descriptions and training manuals up to date.  Are your books current and corporate taxes paid?

3)  Evaluate All Aspects of Your Business Like a Potential Buyer

Pretend you are a potential buyer.  Look at your business with an unbiased eye.  How would you evaluate your company with similar companies in your field?  Make a list of things that makes your company an attractive prospect, ie profitable, loyal customer base, always current with business trends and products for your industry and steadily rising sales.   Also make a list of negative issues ie. old fleet of company vehicles, family members in the business that don’t have specific roles and under-performing product lines that need pruning.  Take action on all the negative aspects of the business as best you can, because a clean business has more value than one that is tired and worn down.

CASE STUDIES OF FAMILY BUSINESS TRANSITION PLANS

Company Profile #1

An accounting firm with a solid base of tax clients and small business bookkeeping and accounting clients.

Reason for Exit

Mother is the owner of the accountancy firm and is the designated accountant.   Has a millennium son, who is ADHD, and easily distracted.   Son has no leadership skills and weak in some areas of responsibility.   The balance of accounting/bookkeeping staff has left the company during the last year, partly because of the son’s behavior.   The owner is not sure she wants to re-build the business.  She knows her son is not the right person to take over, because of his work ethic as well as not holding an accounting designation.

Exit Solution.

Although the owner has investigated selling the practice, she is beginning to realize she isn’t quite ready for an exit.   She has decided to re-build her business by hiring a younger designated accountant in the hopes that this person will prove to have the ability and desire to buy the practice later.

Company Profile #2

A manufacturing company with close ties to the community in which it sells and excellent relationships with its clients.    The business employs the owner, his wife, son, daughter, and daughter-in-law.

Reason for Exit

The owner and his wife have been working hard for over 30 years and are looking at transition possibilities in the next 5 years.  They want to move to a small community on a lake and start a different life.

Exit Solution

The wife handles the payroll and accounting.   If she wants to work remotely, all she needs to do is move the accounting system to a cloud-based so she has more flexibility.  Of the next generation working in the business, they have evaluated that their daughter has the skillset to take over the management responsibilities.   Over the past few years, they have increased her training and responsibilities so that she gets great experience in all facets of the business.   Their son and son-in-law are happy to take on less challenging roles in the business, therefore the transition can take place without family issues causing conflict.

Company Profile #3

A 25-year-old residential cleaning company.   Well run by the owner.  Owner looking at possibilities for transition in next five years.

Reason for Exit

Owner’s husband is close to retirement and therefore they are looking at opportunities to travel more in the near term.    Should owner sell outright or is there another solution?

Exit Solution

In the next couple of years, the owner is looking at training a couple of staff to supervisory positions.  During this time she can evaluate if she can find someone with the leadership skills and desire to rise to the supervisory/manager rank.   If she is able to promote someone within her company, it will free herself up to expand the product lines and add more value to the company.   She will also have time to decide whether to step back from the day to day operations but still retain management control or sell the company to an employee or outsider.

Plan Your Exit With Professional Help

There many resources to help you exit your business.   Sit down with your trusted accounting professional and lawyer to consider your options, well before your exit date.  A business broker can also assess the value of your business.  The most important factor is to clean up your business profit and loss and balance sheet.  The best time to do this is at least 5 years before your intended exit.  You can extract the value from your business if you are strategic about how you exit your business.  Or you can just walk away and shut it down.   Which would you prefer?

Elaine Slatter is the founder of Fabulous Fempreneurship and author of the book “Fabulous Fempreneurship“, A Complete Startup Guide.  Elaine is owner of XL Consulting Group, a small business advisory company.   She can be reached here.


About Elaine Slatter

Elaine Slatter is a marketing strategist, web designer and author of Fabulous Fempreneurship, a startup guide for women entrepreneurs.

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