Have you founded your own family business, nurtured it from a startup to a successful business for the last 25/30 years? Now as you approach retirement, you want to extract value, rather than just shut it down and walk away.


1)  Plan Ahead

Don’t wait until the last minute, when perhaps your business is getting tired, or you are getting tired and you just want out.   Have a succession plan devised at least 5 years before you trigger the event.   This gives you enough time to organize a smooth transition

2)  Clean Up Your Business

Get your business in order.   Pay attention to both your receivables and payables.   Make sure you have good systems in place, job descriptions and training manuals up to date.  Are your books current and corporate taxes paid?

3)  Evaluate All Aspects of Your Business Like a Potential Buyer

Pretend you are a potential buyer.  Look at your business with an unbiased eye.  How would you evaluate your company with similar companies in your field.  Make a list of things that makes your company an attractive prospect, ie profitable, loyal customer base, always current with business trends and products for your industry and steadily rising sales.   Also make a list of negative issues. Do you have an old fleet of company vehicles?  Family members in the business that don’t have specific roles or under-performing product lines that need pruning?  Take action on all the negative aspects of the business as best you can, because a clean business has more value than one that is tired and worn down.


Company Profile: #1

A 50-year-old manufacturing company with $200M sales, 50+ employees.  Primarily a white label producer but with strong own label brands.

The Reason for Exit

This is a privately well-run company, with an efficient board, father, and son in top key positions.   Long term employees.   The reason for an exit?  Heavy investment in equipment required to follow industry leader in packaging.  Market turning towards a different version of the product which would require purchasing another company or investing heavily in R & D., In addition, the prime white label client was squeezing the profits to a bare minimum (aka Walmart).

Exit Solution

A European company with a complementary line wanting to expand in to the U.K. snapped up the company.   The son was offered a 3-year management contract to remain as CEO but exited after one year of the contract with a solid retirement nest egg from the share buyout.   Father retired at 75 having founded the company from his parent’s kitchen in his 20’s.  The clean debt free balance sheet meant the owner could extract the full value from this firm.

Company Profile #2

An accounting firm with a solid base of tax clients and small business bookkeeping and accounting clients.

Reason for Exit

Mother is the owner of the accountancy firm and is the designated accountant.   Has a millennium son, who is ADHD, and easily distracted.   Son has no leadership skills and weak in some areas of responsibility.   The balance of accounting/bookkeeping staff has left the company during the last year, partly because of the son’s behavior.   The owner is not sure she wants to re-build the business because she knows her son is not the right person to take over the business.  His lack of work ethic and no accounting designation make him unsuitable as the heir apparent.

Exit Solution

Although the owner has investigated selling the practice, she is beginning to realize she isn’t quite ready for an exit.   She has decided to re-build her business by hiring a younger designated accountant in the hopes that this person will prove to have the ability and desire to buy the practice later.

Company Profile #3

A manufacturing company with close ties to the community in which it sells and excellent relationships with its clients.    The business employs the owner, his wife, son, daughter, and daughter-in-law.

Reason for Exit

The owner and his wife have been working hard for over 30 years and are looking at transition possibilities in the next 5 years.  They want to move to a small community on a lake and start a different life.

Exit Solution

The owner’s wife handles the payroll and accounting.   If she wants to work remotely, all she needs to do is move the accounting system to a cloud-based system so she has more flexibility.  Of the next generation working in the business, they have evaluated that their daughter has the skillset to take over the management responsibilities.   Over the past few years, they have increased her training and responsibilities so that she gets great experience in all facets of the business.   Their son and son-in-law are happy to take on less challenging roles in the business, therefore the transition can take place without family issues causing conflict.

Company Profile #4

A 25-year-old residential cleaning company.   Well run by the owner.  Owner looking at possibilities for transition in next five years.

Reason for Exit

Owner’s husband is close to retirement and therefore they are looking at opportunities to travel more in the near term.    Should owner sell outright or is there another solution?

Exit Solution

In the next couple of years, the owner is looking at training a couple of staff to supervisory positions.  During this time she can evaluate if she can find someone with the leadership skills and desire to rise to the supervisory/manager rank.   If she is able to promote someone within her company, it will free herself up to expand the product lines and add more value to the company.   She will also have time to decide whether to step back from the day to day operations but still retain management control or sell the company to an employee or outsider.

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