This is the first part of a mini series with Brouse McDowell. Read part two, I Have Decided to Sell My Business, Now What? here.
Business owners today have many more options at their disposal when evaluating potential exit alternatives. In order to be able to properly analyze these options, they must develop their near-term and long-term personal objectives. Are they concerned about their legacy in relation to who owns the business going forward? How much longer do they want to work? If they are ready to retire soon, then they must be comfortable that a sale of the company will generate enough value to meet their financial requirements.
Owners may want to consider options to take some liquidity now but maintain either a minority or majority share of the business through a recapitalization. This option is well-suited for a company with attractive growth options (organic/acquisitions) that can generate increased value, but also has significant equity today that can provide near-term financial security. In the case of a recapitalization, owners must consider whether or not they can effectively work with a partner.