Readiness Analysis

Maintaining Control — "I want to call the shots!"

Maintaining control and influencing business culture are important drivers to an owner operating their business. Paradoxically, at exit, a high degree of control and undue influence on the culture by the exiting owner actually reduces the value of the business!

Less daily involvement of the owner prior to transition, equals more value, which may seem contradictory; however, a buyer values the fact that you employ a day-today operating manager, or management team, who will potentially stay on under new ownership. This provides less risk to potential buyers, which typically results in a higher business value for the exiting owner.

For virtually all business owners, the task of turning the business operations over to others is the most difficult challenge they often face. Yet, in order to maximize the business value, or to create the most seamless internal (family or management) transfer of ownership, a business owner must implement a plan for reducing their daily influence on the business. Careful attention needs to be placed on replacing oneself as chief strategist, visionary and operational leader, because those skills are often the hardest to replace.

In your answers, you indicated that your preference is to relinquish control in order to maximize the sale value of your business. This is a positive approach which may often lead you to a strategic outside acquirer, who truly values the business, and recognizes its future potential.

Strategic buyers often understand and appreciate the "true" value of the business, and may want access to it's customers, suppliers, in order to evaluate it's market position. They might be able to provide cost synergies or additional products and/or services, that could enhance their own company's position. A business transition specialist should be consulted on ways to best prepare you as an exiting owner for identifying and securing this type of high value potential acquirer in your exit planning process.