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Burnt Out? A Cure For Business Owners.

Are routine business decisions overwhelming? Are you looking for quick fixes to solve cash flow problems? Are you dreading going to work? Are you just tired? If you answered yes to any of these questions, you are experiencing the effects of burn out.

With business owners increasingly burnt out, one-third of business owners say they are considering selling their business.  This percentage is much greater for baby boomer business owners who started their business over 20 years ago. Over 85% of these baby boomer business owners’ assets are locked up in their business. They will need to sell their business to cash out!

By now, the first question you might be asking yourself is Why? Why sell a business during a down economy?

As we all know, timing is everything. First of all, there are executives that have been down sized and are looking for privately held businesses for themselves. Secondly, many companies are interested in expanding through acquisition. In reality, there are hundreds of buyers looking for opportunities with a business owner who is ready, willing and able to sell and realistic about selling price.

If you are convinced that now might be the right time to consider selling, then your next question will most likely be is, “what is my business worth”?  If you don’t know the answer to this, you are not alone. Alarmingly, 85% of business owners don’t have an answer to this critical question….and if they do, they usually overestimate the value of their business by 50%!

Although having a formal business valuation is critical and may provide some insights into the value of your business, it won’t necessarily provide you with a key factor in the determination of sale price and deal structure- the buyer’s motivation to buy.   These motivation factors can vary based on the size of your company and the type of buyer. For a strategic buyer, the access to customers and employees may be critical, while to a financial buyer, cash flow and reputation may be the most important factors. 

The fact is that the right buyer in a down economy can provide a great opportunity for a burnt out business owner to cash out.

The third question you may be asking is, so how do I know when to cash out?  This is the question that all business owners should be asking themselves at least once a year.  If you are in your 50’s or are thinking about selling your business in 5 years, you should not only ask this question, but also have an Exit Plan in place. While a business plan’s focus is your business, an exit plan‘s focus is YOU. It helps you develop the strategies to cash out of your business at the right time for the right deal.

When we work with business owners on an exit plan, they improve their focus, make better decisions, feel better about their work, and report less burn out.  These benefits are felt whether or not they decide to sell now or at a later time.

In conclusion, if you are burnt out, you may or may not want to cash out now - but you certainly want to have all the facts to make the right decision for your situation. If anything, planning for your exit may be more beneficial to your state of mind, as you will know where you actually stand and what you need to do to "cash out". Of course, if you decide to stay in business, you've now made an economic decision based on facts rather than a gut feeling.  Burnt out? Developing an EXIT PLAN can be the cure!

Susan Rosner, MBA is the Managing Partner of Calder Associates of Pennsylvania. Calder Associate is a regional mergers and acquisitions and businesses consulting firm specializing in exit planning, equity growth consulting and mergers and acquisition transaction services. www.calderassociates.com