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Alternatives To Selling Your Business


The decision to retire or sell your life’s work and passion is not always an easy one. Yet, some factors may force your hand – such as illness, lack of capital, burnout, a partner dispute, family issues, or the failure to reach necessary financial goals. Sometimes selling the business is not the best decision. Here are a few alternatives to consider before you jump into the long, complicated process of selling.

 

Don’t Sell Until You’ve Thought of These Exit Strategies…

  • RefinanceIf you’re just starting to slip into the red, try to refinance your loan for more favorable terms.
  • Re-capitalizeReduce your risk and gain better partners by selling off equity and refinancing existing debt.
  • Buyout managementOffering severance pay to some of your top-grossing employees can save money.
  • Hire new staffStirring the pot with fresh blood every once in a while can stimulate innovation.
  • Transfer to next generationLeave your legacy by transferring the business to your progeny.
  • LiquidateIf you’re really hemorrhaging money, your business may not be worth much. It’s best to liquidate.
  • Enhance the valueA few small investments to get the company in better shape helps you sell for more later.
  • Enter into a strategic allianceLook for new partners and new directions to achieve your objectives.  
  • MergeIs another company looking for what you have? Mergers can be a great way to share the risk.
  • Create an advisory boardConsultants have a knack for bringing in outside expertise to turn business around.
  • Buy out unproductive partnershipSell off or liquidate part of your business that is not profitable to recoup.

 

Is Selling The Best Option For You?

Sometimes your best option is simply not to sell at all. After all, you don’t want to regret your decision years down the road. Owners that leave (because the “business climate isn’t favorable”) often find that the economy has a way of turning around quickly years later. Other people may feel they need a break from working so hard, but feel bored, anxious and naked without their beloved companies.

  

How To Stay, But Get The Breather You Need

Consider ways you can rework your business to be more self-sufficient, allowing you to still rake in a portion of the gross profits. If you can collect money gradually over time, rather than a big lump sum pay-out, you might be in a position to make more money. You may linger as a consultant or choose to become nothing more than a majority shareholder.

Take a good look at your staff and seek to promote the best and brightest people, grooming them to take more executive roles in the corporation. If you don’t have suitable candidates, hold recruiting events and solicit top talent by working with employment agencies. The best type of transition doesn’t happen overnight, but unfolds over a period of several years. By the same token, the best type of sale doesn’t happen out of dire need for capital, but rather, as a natural progression in the business cycle.   

 

 

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Resources:
Robbinex Intermediaries: 14 Alternatives To Selling Your Business
Acquisition Advisors: Leveraged Recapitalization – Cash Out Without Selling Out
Business Week: Alternative Exits For Business Owners


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