Company for Sale? WHY SOME OWNERS CHOOSE NOT TO SELL THEIR BUSINESSES By Stephen Klein, CPA ike every major decision we make in our lifetimes, choosing whether or not to sell your company is significant and life changing. While many business owners ultimately decide to sell their business, some owners make the choice not to sell their company for very legitimate reasons. Namely, they still have enough fire in their belly to fuel their investment of time and energy in the business, and they are grooming interested family members or employees to one day assume the reigns. Some owners, however, have businesses that are prepared for sale, but hesitate. Why? These owners typically don’t sell when they should because: they procrastinate, they fear the unknown, or they fear losing the known. Procrastination is Often the Problem Procrastination on the part of an owner is not uncommon and has many causes. First, some owners just do not know how to start planning an exit. If you are one of those owners, then reading the remainder of this article is a good start. The next step is to contact a trusted business advisor who can help you prepare an exit plan that allows you to cash out of your business and leave in style when you are ready to do so. Second, some owners think that they can always sell later. These owners overlook the demographic evidence indicating that when most baby boomers reach retirement age, the glut of companies in the marketplace may drive prices down. Other owners in this group understand that the level of activity in the mergers and acquisitions market can have a huge effect on the sale price of a company, and their strategy is to wait until the market recovers. The third group of procrastinating owners consists of those who believe that because they have “good” businesses, their exits require no significant planning. When they think about selling, they assume that there is not much for them to do because when the time is right, suitable buyers will appear and pay them great prices for their companies. It does happen, albeit rarely, that the right buyer appears and pays a premium price for a great company. However, it makes more sense to prepare for the biggest financial transaction of your life rather than entrusting the success of your business exit to Lady Luck. Fear of the Unknown Owners who suffer from the fear of the unknown usually hold one (or more) of the following opinions: the business is not worth enought to satisfy my financial needs and objectives; if employees discover that I am try to see, they will quit; I am indispensable to the company and will be required to work for a new owner - I do not like working for anyone; the sale process will take too long and cost too much. Fear of Losing the Known On the other hand, the fear of losing the known is usually based on one of the following two reasons: the business has been my life, giving me a great deal of meaning and focus; I will be lost without it. Or, the government will take too much in taxes. It is more lucrative to stay for now. If one (or more) of these concerns resonates with you, meet with an experienced business transition and exit planning specialist to assess them. They can help you identify which concerns are real and others that may be easily resolved. They can also help you address your personal and business objectives, review the factors associated with exiting your business, and remove or reduce common roadblocks to a successful exit. If you are considering selling your business, take the time to review your options – and your fears – with an exit planning specialist and trusted business advisor. They will help you make the decision that is right for you. ■ Stephen Klein, CPA, is CEO and founder of Exit Strategy Solutions, LLC and a member of Business Enterprise Institute’s International Network of Exit Planning Professionals. The company provides transition and exit planning solutions and merger and acquisition services to business owners. Stephen can be reached via email at Klein@ExitStrategySolutions.com or by phone at (609) 731-8419. THE JOURNAL OF THE HEALTHCARE BILLING AND MANAGEMENT ASSOCIATION 27 L
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