“The enterprise value specialists at Ceibass work with lawn & landscape business owners to help them prepare for and sell their companies.
“At Ceibass we have seen many instances where sellers were not organized to sell their businesses and they left money on the table. They contracted us too late in the process, subsequently they suffered,” said Tom Fochtman, Ceibass CEO. “It could have been not understanding the true value of their business, an unfavorable deal structure, bad timing or not having a buyer-ready management team in place. Without an exit plan sellers make too many unforced errors. If you’re an owner, stop thwarting your own intentions.”
In addition to the challenges above, the Ceibass team went on to add these insights about challenges that sellers face when they don’t have an exit plan:
- Creating an exit plan with a reliable source like Ceibass gives the seller a realistic idea of what their company might be worth, before and after taxes. Are they satisfied with that or not? An exit plan, reviewed annually, gives them time to increase the value of the business if the number is too low. Without a plan, they just have to live with whatever number they get. Usually, not a good idea because there is too little time to recover before they retire.
- With an exit plan a seller is forced to deal with the question, what’s next? This forces talk and speculation about what the seller wants to be doing and not doing, after the sale of the business. What future do they see for themselves after the sale of their business?
- Without an exit plan too many companies are not “buyer ready.” This compromises the value of the business, creates too many uncertainties for the buyer, and reduces the value of the business.
- Creating a plan allows sellers to identify strengths and weaknesses of their company and gives them the opportunity to “fix” what needs “fixing” making the company more attractive to buyers.
- Without an exit plan a seller hasn’t thought through the tax and estate consequences of how the deal should be structured to meet their needs. This can cause problems because “it is not how much you make, it is how much you keep.”