Even with planning, it can take six to nine months to get from the point of starting the sale to consummating a transaction with an outside buyer, said Scott Mashuda, managing director of River's Edge Alliance Group, an M&A advisor to businesses."Failing to plan is planning to fail."Some owners, who could be used to a do-it-yourself approach, may try to do the same when it comes to a sale or transfer of their business.
Justin Goodbread, a certified financial planner and president of the wealth management firm WealthSource, offers the example of a six-figure mistake that he — a seasoned exit planning professional — almost made in a recent deal. Had it not been for his outside advisors, he would have signed an official letter of intent that would have limited his tax-planning ability.
Sixty-seven percent of owners polled believed their heirs want the business and 33% thought their heirs would be most interested in assets from the sale. Among heirs, however, 52% claim to want the actual business, compared with 48% who said they prefer assets from the sale. With founders, she discusses their desires for the future of the business and other financial considerations. Consultations with the children include their capacity and readiness to buy out the parents and run the company. If joint ownership between siblings is an option, she assesses their ability and willingness to work together. Armed with this information, she brings both sides together so they can begin to take the next steps.