Business owners start out as business owners for a whole host of reasons.
Sometimes they have become fed up of being employed and of thinking to themselves that their boss really doesn’t have a clue and they could run the business so much better themselves.
Sometimes redundancy creates an opportunity to rethink what a person is doing with their lives and might also provide the capital to start their own business.
One or two really bright people spot a gap in a particular market and go for it by setting up their own firm. A few people turn a hobby or interest successfully into a new business enterprise.
Whatever the reason for starting out in business, relatively few at the start up stage are thinking about a future exit strategy.
That type of thinking tends to happen for most of us many years later when the business has “matured” and the owner is considering what the business might look like in the future without or without him or her at the helm.
Of course at some time they are going to think about the value of their business enterprise and what someone might be prepared to pay for it.
At that time they will probably get some expert help as they work out their strategy for selling the business; a good Accountant to help with a valuation, a good Solicitor to make sure any contracts are water tight and a good Management Consultant to help with getting the business into the best shape ahead of it being sold.
Once a value has been established that will then become the negotiating point for both buyer and seller.
But there may well be a different way of looking at it.
What if the business was valued at £1 million but the best offer on the table was £600,000? Many business owners would say “let’s wait around for another potential buyer” and withdraw from negotiations.
But there is another professional that you might want to get onto your team before you pull the plug on the offer that you didn’t think was good enough. That person is a Financial Planner.
Your Financial Planner can work with you to establish your “number”; the amount of capital that you need in order to live the life you want to live but without having to continue to work in the business.
What if you only needed £600,000 to add to your other resources to be able to give up work and have financial security? Perhaps then you might be more prepared to discuss the offer that you thought wasn’t good enough
So perhaps we should be asking the question how much do I need to sell my business for in order to stop work and have the life I need?
