What’s Standing in the Way of Your Business Exit?, with Bill McDermott, Host of ProfitSense
In this commentary from a recent episode of ProfitSense, Bill McDermott laid out several factors that can influence how and when a business owner exits.
Bill’s commentary was taken from this episode of ProfitSense.
ProfitSense with Bill McDermott is produced and broadcast by the North Fulton Studio of Business RadioX® in Alpharetta.
Bill McDermott: I want to take a moment right now and ask my business owner audience the question, What’s standing in the way of your business exit? Recent surveys show that 80 percent of business owners will exit their business in the next ten years, yet only 25 percent have created any sort of plans in writing for a successful outcome.
I’m working with quite a few firms that are considering an exit. One situation includes a majority owner who has several partners and maybe discovering those partners don’t think like business owners and may just prefer to remain employees. Another owner is a very successful business. He’s a baby boomer and is ready to retire, but is having a hard time removing himself from day-to-day operations.
So, what are some things that could be standing in the way of our exit? First, the economy. In a recession, the value of a business may decline making it more difficult to sell. Also, if the economy is weak, it may be more difficult to find a buyer. Industry trends. If the industry is declining, the value of a business in that industry may decline. If the industry is changing, it may be difficult to find a buyer who is willing to take on the challenges of a changing industry. Third thing is taxes. This is one component that’s very complex. In almost every case, selling a business for a gain will trigger either capital gains or ordinary income tax.
So, what can we do as owners? Time the sale of our business carefully, plan carefully, and seek advice from your professional advisors, and know that alternatives such as merging with another company also exists. With careful planning and execution, it is possible to sell a business at a fair price, even in challenging economic or industry conditions.
About ProfitSense and Your Host, Bill McDermott
ProfitSense with Bill McDermott dives into the stories behind some of Atlanta’s successful businesses and owners and the professionals that advise them. This show helps local business leaders get the word out about the important work they’re doing to serve their market, their community, and their profession. The show is presented by McDermott Financial Solutions. McDermott Financial helps business owners improve cash flow and profitability, find financing, break through barriers to expansion, and financially prepare to exit their business. The show archive can be found at profitsenseradio.com.
Bill McDermott is the Founder and CEO of McDermott Financial Solutions. When business owners want to increase their profitability, they don’t have the expertise to know where to start or what to do. Bill leverages his knowledge and relationships from 32 years as a banker to identify the hurdles getting in the way and create a plan to deliver profitability they never thought possible.
Bill currently serves as Treasurer for the Atlanta Executive Forum and has held previous positions as a board member for the Kennesaw State University Entrepreneurship Center and Gwinnett Habitat for Humanity and Treasurer for CEO NetWeavers. Bill is a graduate of Wake Forest University and he and his wife, Martha have called Atlanta home for over 40 years. Outside of work, Bill enjoys golf, traveling, and gardening.
Connect with Bill on LinkedIn and Twitter and follow McDermott Financial Solutions on LinkedIn.
