Some more conclusions concerning credit issues
The third conclusion is that most owners have an unrealistic idea of business values and have no firm plans to build the business to reach the target value they have hoped to achieve. Does this also apply to you? Have you based your answers on an up-to-date, formal valuation provided by a professional valuer, or your own estimates? If you have used your own estimates, what valuation methods have you used?
The last conclusion is that most business owners have a limited understanding of the range of exit options available to them and hence, in most cases, fall back on a trade sale ‘to some interested party’ (or a handover to a family member), without having analysed who the interested party would be (or whether the chosen family member is suitable, or even
willing to take on the business). Also, without a clear exit option in mind, most of them have made no effort to tailor the growth and development of their business to the type of exit they believe is the optimum one.
How do you shape up here? Could some of these conclusions also apply to you? Have you got a plan, or do you fall into the large category of business owners described by John H. Brown in Exit Planning Review when he said: ‘… few owners reach their objectives. Why? Because they don’t have a plan to achieve them.’