Make sure you have all the advice you need before you move forward with a business sale.

Who am I if not my business? It’s a question many business owners face when the time comes to sell or transition out of their business. Most have been focused on their business for so many years; it’s hard for them to imagine not being part of it any longer, let alone being thoughtful and proactive in developing an exit strategy. Here are some telling statistics:

In a recent survey (source: The Exit Planning Institute “State of Owner Readiness” study 2017) of business owners thinking about exiting, only 42 percent have a plan for their life after the sale. From the same survey, only 14 percent have a written plan and have communicated it to their successor management team and employees. Of the businesses wanting to sell, only 25 percent are ready to go to market to achieve their maximum value or appropriate structure. 70 percent of the businesses that go on the market do not sell.

Clearly, the decision to sell or transition from a business goes far beyond finding a buyer and setting a valuation. And it’s something you should start planning for years in advance. Anyone considering the sale of a business should assess the following questions.

Who Do I Engage?

A business owner must identify a team of trusted advisors/experts.  A business exit/succession strategy is unique and likely foreign to you. And it should be specific to your business. It depends on variables such as the market demand for the fair value of your business, your desire for a particular sale structure and what you envision for the future of your business, and yourself.

So, ask yourself, who do you trust? Think of the qualified professionals you have engaged throughout your career. Some of those professionals may have a seat at your exit planning table. However, don’t hide under the comfort of who you know. Start to think of how you can engage new and objective advisors to give you ideas that you may not have encountered in the past. A qualified exit planning team should include the following professionals:

A FINRA licensed merger and acquisition advisor Qualified legal counsel for estate planning Your current CPA A CPA familiar with sale transaction expertise A wealth management advisor An independent entrepreneur advisor

FINRA Licensed Merger & Acquisition Advisor—This team is your exit planning quarterback. They help you get your business ready for sale by tightening up the financial metrics which make businesses look attractive to buyers and/or to leverage the sale at maximum value.

Independent Entrepreneur Advisor—This team will help you with your psychological hurdles and assist you in understanding how each potential transaction structure will affect the ongoing success of your business, the projected longevity of employee job security and help you form your successor leadership team.

Wealth Management Advisor—Most business owners have engaged investment professionals throughout their career.  However, a comprehensive wealth management advisor won’t invest your financial assets until they understand your values and entire net worth. A comprehensive wealth management advisor will align your objectives to your financial resources and create a comprehensive strategy.

What is Holding Me Back From Exiting My Business?

The most competent independent entrepreneur advisors will have you take a “readiness assessment” to gauge where you are emotionally and logically with regard to separating yourself from your business.  They will help you identify your time line for implementing your desired strategy. Before assessing the value of your business, think about how you want to exit your business. Think of the following:

Do you want to sell it to a third party (e.g. a competitor or private equity firm) and walk away as quickly as possible? Do you want to ensure the ongoing success of your business and advise the successor management team? Do you want to sell the company to your employees or a group of your executive leaders? Do you want certain or all family members to stay involved in the business?

What Will My Life Be After The Sale of My Business?

A competent and comprehensive wealth management advisor should be sought to assist you in understanding and prioritizing your values and objectives. The four key categories that are typically explored are entrepreneur succession, lifestyle, social impact and legacy.

After your objectives are prioritized, the wealth management advisor can then align your financial resources with your values. There are many factors that tie into the successful sale of a business: some financial, some emotional. All must be considered carefully and well in advance of the sale of the business for the experience to be successful and healthy for all involved.

Jack Frencho is a wealth management advisor with The Private Client Reserve of U.S. Bank in Columbus.