A major part of any business plan is the owner’s exit strategy. A lot of owners don’t think of this until it comes closer to the time when they want to retire and reap the rewards of what they built.
For me, my exit still is a long way off. But I do have a plan.
Although I haven’t personally sold a company, I have bought several over the years — and I’ve seen how the owners really wrestled with their decision. They wonder whether they should sell to a complete stranger, or leave the company in the family or with friends. It seems like a no-brainer either way: They should sell to whomever has the money, right? But this is a very emotional time, and judgments can get cloudy during the selling process.
A BIG DECISION
With one of my acquisitions, the owner was a very nice man who really cared for his clients. The company was his baby, and he in no way wanted it to diminish after he left. Family was waiting in the wings, ready and willing to take over.
And then there was me, with all my ducks in a row, just waiting on his answer. I knew he was struggling with the idea of letting some stranger’s company come in, vs. selling to family and making an easier transition. But apparently some of his relatives were not as conflicted, because they were pushing hard for me to take over. There were a few factors in play, but in the end, I became the new owner.
To this day, I believe he’s glad I did. But on the day I slid the check across the table and he signed the contract, I saw him hold back a tear or two. It was obvious this was a big decision for him.
ISSUES TO CONSIDER
It’s one thing if an owner’s son or daughter were right there alongside him as the business grew. They’re the obvious heir apparent, and usually transitions of this nature go extremely well. But I’ve also seen some real disasters.
Entitlement sometimes does not translate to the company being left in good hands. The honest owner whose blood, sweat and tears built the company knows it could be just one generation away from failure.
There’s also the consideration of getting paid. Often, family and friends want a sweetheart deal or the ability to pay over time. But when selling to a third party, this is seldom an issue — which can greatly influence the owner’s decision.
Selling to a company often offers a cleaner break as well. The seller is no longer entangled in the fray of day-to-day dealings, whereas with family or friends, he or she has to pick up the phone when they call.
So, what will I do when I reach that point? As stated before, I have a plan. But that doesn’t mean I won’t wrestle with the decision when the day comes. I, like many owners, consider my business my family. It’s a huge part of me that I’ve cared for and nurtured for many years. Regardless of my decision, I just might choke back a tear or two, too.
Insights from the Pest Cemetery crew
“Money would be secondary. The company buying my business would have to be ethical and treat my clients like I do: family.”
— Brent Towle, Master Technician and Owner, Spectrum Pest Control Eco-Tech LLC, Kenosha, Wis.
“I’d prefer to sell my business to a friend or family. We are third-generation and would love our company to run for many more generations in a friend or family bloodline.”
— Chris Monroe, Owner, Grand Rapids Pest Control, Grand Rapids, Mich.
“I would rather sell to a company because I would feel like I could demand what my business is worth.”
— Tommy Everitte, Owner, AAA Exterminating of Raleigh, Raleigh, N.C.
“My daughter will take over if she wants; if not, my business will be sold to a company.”
— Byron Barnes, Owner, Barnes Exterminating Co., Johnson City, Tenn.
“In the end, money talks. But I really hope to sell to someone who will care.”
— Dane Gilson, Owner, Bug Wranglers, Payson, Utah