Courtesy Ferraro, Amodia & Zarecki CPAs
Stephen L. Ferraro
CPA/ABV/CFF, CEBC, MAFF, CVA
The success of exiting a business depends greatly upon the mental perspective and preparation of an owner during the exit process. Business owners tend to fixate their thoughts only on running and growing their business.
However, there is a tremendous amount of value in seeing the “big picture” with your exit and thinking about the future and where you would like both the company, and yourself personally, to end up.
The owner who is able to see the larger picture and understands that stepping out of a business is an opportunity to move both themselves and their company toward a new stage of life, will be best prepared to execute a successful business transition.
The Transfer Timing Slots
One of the first big picture concepts that owners should grasp is the idea of timing slots. Much like a slot machine, you want to see if you can match up three critical areas—personal timing, company preparedness, and market timing. A solid ‘big picture’ of an exit considers all three.
Market Timing
Markets run in cycles and timing is important. If a business is performing well because there is a favorable economy, all things being equal, this can be an optimal time to consider an exit. Valuation is high, employees are engaged, and, often times, buyers/investors have a high degree of interest and activity.
The last three decades have followed a similar market cycle and this decade is following suit. Therefore, your “big picture” in terms of market timing indicates that the next few years are ideal in terms of market timing.
