How to Exit Your Business

The current upheaval in the financial markets may be causing you to harbor thoughts you hadn't considered before: "I've had enough" or "I wonder if I can sell my business."

Because a majority of businesses owned by women over 55 generate less than $100,000 a year, disposing of your business might be a suitable move.

As a seller, you have two choices: You can sell to or merge with another company, or you can close your doors.

Sale or Merger
If your company provides a product or service, there's likely good potential for you to be acquired. Even in down economies, some companies have the wherewithal to make acquisitions.

Here are tasks to complete prior to looking for a suitor:

1. Get your financial statements in order. Meet with your accountant to make sure your balance sheet and profit and loss statements provide an accurate representation of your business.

2. Develop a SWOT statement. This document enumerates the Strengths, Weaknesses, Opportunities and Threats of your company. Creating this statement will do two things:

    a. It's likely to uncover information that will help you attract a potential buyer. Many times we are so busy in our business we lose sight of many of its important features and benefits

    b. It provides critical information that goes beyond the numbers to someone interested in acquiring your company.

3. Develop a list of criteria to look for in a buyer/partner. Your business reflects you and your hard work. By determining the qualities and practices you would like to see in the future owners, you make future decisions much easier. Some criteria might be:

    a. Size of organization you will be targeting

    b. Management style of owners

    c. Reputation of owners

    d. Geographic locale

    e. Structure of the deal

Once you have the documentation and criteria ready, it's time to look for the appropriate buyer. There are four excellent places to start the process of meeting your buyer:

1. Your most trusted business advisors: Your accountant, banker and attorney all have their fingers on the pulse of various businesses, and they are familiar with your business. Often they can make introductions. They can also help you value your business.

2. Executive directors of professional associations. These people know who is interested in buying or selling their businesses within their industry. They also have extensive networks that can assist you.

3. Trusted vendors. The important word here is trusted. Vendors know a great deal about your industry because they are suppliers and know who is growing and who is strong enough to be in acquisition mode.

4. A final resort would be a business broker. This is a person or company that helps buy and sell businesses. They are a last resort because they charge fees and commissions for assisting you. If the first three sources haven't been able to help, then business brokers are a good alternative.

Closing Shop
Closing your doors responsibly and profitably is not as simple as shutting the doors one evening, disconnecting the telephone and pulling down the website.

Again, there are several steps in the process to ensure that you retain as much money as possible and keep your reputation sparkling clean:

1. Make sure your receivables are collectible. Are there any small problems to be cleared up so they can be paid?

2. Be sure to clear up any unresolved legal issues.

3. Provide for taxes.

4. Liquidate any excess inventory.

5. If you have employees, notify them in advance and give them an incentive to stay until the company is closed to make sure everything flows smoothly.

6. Notify customers and suppliers in a timely manner.

The decision to close your business is a difficult and likely a painful one. For many of us, our work defines us. Closure affects many parts of our lives. Once the decision is made, we owe it to ourselves, our employees, our customers and our suppliers to complete the process in the best possible way.