Increasingly, owners who still enjoy the cut and thrust of business but want to reduce their workload see restructuring as an option. They either sell a stake to current management and encourage them to step up their involvement, or they bring in new partners.
"You could bring in a manager and craft the package so that they have an incentive to run the business like an owner would," suggests Lowe.
How do you plan an exit?
Start early and be comprehensive. A formal succession plan should include an owner's goals and objectives, the intended exit strategy (plus a workable "plan B"), and a timeline for specific actions. Taking a gradual, methodical approach will also help your employees to get ready for the change.
"Preparation is key," says Stuart White, Business Development Director of GE Capital. "If it's a trade sale, then you need to make sure you understand the accounts and that all the various legal and regulatory matters (tax, leases, payroll records and so on) are available and complete."
How should you handle it?
Giving up the business you've spent a working lifetime building is never easy. But try to take the emotion out of the process, counsels White. This is particularly important when trying to arrive at a realistic figure for the sale. Most businesses are valued by one of three methods: their assets, income, or the market approach. Whatever the approach, any potential buyer needs to be able to foresee a return on their investment, so an unrealistic price on your part will just leave you stranded. Get a clear-eyed view of future maintainable earnings and make sure you can back it up.
Lowe recommends seeking advice: "You might think your business is tidy and ready for sale, but someone will come in and suggest it isn't. So talk to experts. Talk to your bank, too, and ask exactly what kind of information a buyer interested in your business would need, and then get that ready early."
Remove yourself from the picture
Before you do anything else, start reducing your day-to-day involvement. You want to be working on, rather than in the business, so that if you were to step away for a month it won't grind to a halt. If your business is like a child, then this is the moment you wish them well and let go.
For more insights into New Zealand businesses in the Mid-Market and the qualities they share, download the
GE Capital New Zealand Mid-Market Report 2014