Harvesting the Wealth
Harvesting the Wealth can involve either an exit plan to leave the business or a plan to access some of the financial rewards of the business in order to invest in other new ventures.
Entrepreneurs differ considerably in their intentions at the end of good business growth about what to do with successful start-ups. There are many who grow and sell several businesses in their lifetime. Others build one business and stay with it for their lifetime.
Still others build a business then as part of a harvest plan, sell some of the stock in the business to invest in other businesses. All of these options are available to the successful entrepreneur in the Growth Stage but it is important to seek appropriate professional advice in order to determine the strategy appropriate for you, and for your business.
One option detailed here is to sell the business.
Selling the Business is a planned process that requires preparing a financial analysis, examining tax implications, advertising the sale and closing the deal.
Surveys of business owners reveal that the most frequently cited reasons for selling their business are related to:
- boredom and burnout
- lack of operating and growth capital
- no heirs interested or capable of taking on the business
- aging and health issues
- a desire to put the money into other businesses or interests.
Accountants, lawyers and other financial advisers with special expertise in valuing and selling businesses can help you develop a plan for the sale. The key steps are to:
- prepare a financial report on the past performance and future financial forecasts for the business
- get the business valued by experts
- consider the tax implications of a complete sale versus selling some shares, some assets and so on
- time the sale so that it occurs when the business is highly profitable and operating in a healthy economy
- publicise the sale through the usual channels of professional advisers and media
- be involved in meeting with prospective buyers, especially if you are considering not completely selling the business, but want buyers to be investors
- assist in other issues of transition, especially in introducing the buyer to major customers, the management team and staff.