Bringing a business to success is an emotional journey from start to finish. Years are spent making sacrifices and taking tough decisions. So, as you get closer to retirement age, choosing to sell your business can be a bittersweet step to take. You raised your business like a child, and you have grown attached to it. How do you begin to make the decision to sell it?

First and foremost, you need to know your reasons for selling. Perhaps, you started your own business, so you could take control of your life and call the shots. Maybe, it was to provide a better life for you or your family. If you are reaching retirement age, then you have probably made a full circle and came back to those initial reasons. Those same motivators can be the drivers behind your ultimate decision to develop a strategy so that you can exit your company.

You love your business, but you love your family too. Perhaps you feel it’s come time to refocus your time and energy on your personal life. That’s okay, and you have several options at your disposal. Balancing work life and home life can be a challenge. Don’t let your obligations to your business keep you from fulfilling your goals at home.

If the decision to sell is on the table, there are a few paths you can take. A partial sale of your business is one option. This option is intriguing if you aren’t sure if you are ready to leave your business entirely. Bringing in a strategic buyer for your business that can begin working alongside you and help your business grow to its full potential will give you more time for your personal goals, while still allowing you to stay involved in your business. You can take on a less rigorous role without having to step down completely.

Strategic buyers are looking for a synergistic partnership that will allow them to either expand their footprint within a particular market, or one that will give them the chance to break into a new industry. Your business will add value to a strategic buyer’s plans , so they will want to see success in your company. This means your incentives will be aligned and if your company isn’t successful, neither is theirs.

Another option is a sale with an eventual complete exit. A complete sale does not have to happen immediately. You can slowly transition out of your business over time. This is a good option if you want to retire and leave your business completely, but care about your employees and the legacy you’ve left behind after you are gone.   

A buyer who buys your business out right is called a financial buyer. Your business is an investment, and this buyer will need to have a management team in place, most likely your management team. If you want to make sure your business is going to be okay without you, it’s a good idea to transition with the business, so your employees can get acclimated to the changes as well.

Also, if your employees see your commitment and support to transitioning through the changes with them, it will help alleviate doubts they might be having about the sale themselves. When you decide to leave the business you love, you want to make sure you are leaving it in the right hands, and you want to make sure the employees who helped you build it are in good hands as well.

One thing you definitely should not do is tackle a sale on your own. If you are vested in focusing on selling your business and neglect your daily responsibilities within the business itself, you can potentially harm your business because your focus has shifted. Successfully completing a sale takes a great deal of time and understanding of the mergers and acquisitions transaction process. Patience is a virtue, and selling your business will take a little time, but with the right team in place, you can get maximum value for your company.

As a business owner, you sacrifice a great deal of time and hard work to bring your business to success. As the business grows, your workload does too. You start in the front driving innovation and sales, then you end up in the shadows working on daily operational tasks, often obligatory, just to keep things afloat. You know you’re needed to keep the business running, but you want to make sure it continues to operate efficiently if you aren’t around.

What options are there for you when looking to retire? The three main ones are to sell, pass the company down to family or to shut it down completely.

The latter may seem dramatic and not sound so appealing, especially after years of establishing a business and investing copious amounts of time and money into the venture. Unfortunately, for the baby boomer generation, it is increasingly likely that this could happen if a well thought-out succession plan is not implemented.

There is much speculation as to why there is a succession crisis – here are a few possible scenarios as to why this has happened:

THERE IS NO ONE IN PLACE TO TAKE OVER THE BUSINESS

The generation after baby boomers, Gen X (typically those born between the early 1960s and early 1980s) are not as numerous as their predecessors. The generation after, millennials (typically born between the early 1980s and the millennium) are generally not yet of an age to take over a business.

Read also: Inspiring the Millennial Generation

RAPID CHANGES IN AUTOMATION & TECHNOLOGY

Those Gen Xers and millennials who do want to start a business will not want to take over one they feel is antiquated. A lot of businesses now have an online offering, or machines to automate the process, and this is changing how business is done. As such, the younger generations may not want to go into a business in an industry that will not be around for
much longer.

International M&A specialist, Benchmark International, has successfully negotiated the sale of its client, FAST of Florida, Inc. (“FAST”) to Southern Air & Heat (“Southern HVAC”), a portfolio company of MSouth Equity Partners, an Atlanta-based private equity firm.

Based in Clearwater, Florida, FAST is a leading provider of heating, ventilation, and air conditioning (HVAC), plumbing and electrical sales, installation, and maintenance services to the residential and commercial markets. In 1972, the company was established as a small air conditioning repair shop by Eddie Vaughan. Eddie’s wife, Melissa, joined the company in the early 1980’s, assisting with administrative duties and bookkeeping. As the company grew, FAST evolved to expand its service offerings in order to remain competitive and add additional revenue streams. In 2005, Mr. Vaughan passed away after a long illness, and Melissa assumed ownership of the business. Under Mrs. Vaughan’s leadership, FAST has continued to experience tremendous growth while continuing to offer the same level of quality service the company was built upon. Today, the company employs nearly 50 people serving Pinellas County, Florida and the surrounding markets.

Headquartered in Orlando, Florida, Southern Air & Heat is a leading provider of essential maintenance, repair, replacement and new installation services for the residential and commercial HVAC markets. Currently, the Company serves over 100,000 homeowners across its target markets. Southern HVAC is financially backed by MSouth Equity Partners, a private equity investment firm that provides equity capital and expertise to support management teams of lower middle market companies. Founded in 2007, MSouth manages $1.3 billion with three active funds, and is the successor to Cravey, Green & Wahlen, which was founded in 1984.

President of FAST, Melissa Vaughan, stated, “Benchmark International played an instrumental role in helping me to exit my family legacy business gracefully. The team did an outstanding job of marketing my business toward motivated buyers, and ultimately finding the perfect fit in Southern HVAC. I would like to thank the Benchmark transaction team for the extraordinary effort in making this transaction a reality.”

“Our focus was to find the acquirer that shared FAST’s passion and commitment to providing a personalized level of service while retaining the culture that Melissa has worked so hard to preserve,” said Trevor Talkie, Senior Associate at Benchmark International. “FAST is a compelling addition to MSouth’s growing HVAC platform, and we are truly honored to have worked alongside Melissa and her team toward this successful outcome.”

Tyrus O’Neill, Director at Benchmark International added, “After the journey Melissa has been through, we’re happy to see the process reach an ideal end result. On behalf of Benchmark International, I’d like to wish both parties the best of luck moving forward.”

As we embark on the year 2018, it is important to acknowledge the advantages of engaging your business for sale. Mergers and acquisitions was strong in 2017 and is expected to continue full steam ahead moving into 2018. You can count on Benchmark International to stay on top of current trends to bring you the highest level of professionalism in the sale of your business.

There are many things to consider when you are thinking of a potential exit, whether it be your own personal/business circumstances, the overall M&A market or potential tax implications.

According to PwC’s latest Global Family Business Survey, only 16% of the 2,378 businesses interviewed had a documented succession plan in place.  It is particularly important for those involved in a family business to consider an exit strategy at the earliest possible stage, especially as the Business Families Foundation reports that only 13% of family businesses make it to the third generation.