Exit Your Business Stage Right
The Arrogant Buyer
From my experience most business buyers come in with a degree of arrogance.
This is particularly true of professionals from industries such as banking, finance, medical and believe it or not — accounting.
These folks have been trained very well in their expertise and are usually capable of fixing such complicated things as sick and diseased bodies and bookkeeping errors.
They have a tendency to feel they can fix and improve a business better than the sellers could.
This overconfidence can do them in.
As we are all well aware, horticulture businesses have unfriendly and invisible partners called the “seasonality” and “unseasonal weather” to contend with, and those professionals have typically not dealt with such deceitful foes.
The “Well-Qualified” Buyer
Having multiple exit options is really the overall best strategy, trumping any single other strategy. And the best of those options is to have a qualified and capable buyer in place.
This buyer must be well qualified or the situation is sadly deteriorated from where it could and should have been.
The operative word here is “well” (qualified) because an element of capability is the financial ability in addition to the acumen and fortitude to manage the business.
Well-qualified buyers have better options than others and will be able to choose better businesses that are more profitable and better run.
The Boomerang Buyer
Unfortunately, many buyers (including employees) are less than well qualified, meaning they don’t have the ability to pay cash or to get bank financing and turn to the desperate-to-sell current owner.
Seller financing is a bitter pill to go with the sale of a business because it is one with high boomerang potential.
When a business comes back to the former owner, it comes violently crashing back, causing damage to the reputation of the business after a mess has been created.
The former owners are very reluctantly forced to come out of their retirement to take over and once again are trapped in a business they desperately want to escape.
Liquidation
The process of liquidating a business asset is typically not the best because it is dependent on too many uncontrolled outside factors, especially related to the timeliness, or un-timeliness, of the sale.
I’m not going to go into this option further at this time because it is most often, though not always, the exit choice of last resort, and likely to lead to the retirement resort of last choice.
Watch for the second part of this article to appear next month, in the July issue of Lawn & Garden Retailer.
The focus will be on building equity in your business today, for better transition options tomorrow.
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