International Door & Operator Industry

SEP-OCT 2017

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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Page 49 of 118

TOP 10 WAYS A dealership owner will inevitably, at some point, sell or transition the business to new owners. Obviously, we can't live forever, but a well-managed business can outlast any owner. When it is time to sell or transition the firm to new owners, the owner has many choices. A business might be turned over to a family member or a key employee or key employees, or to a non-related third party. Regardless of whom the new owner might be, a prudent owner wishing to leave the garage door business must prepare the business for the transition to assure that selling the business generates a fair return for the owner. Note that we did not include an Employee Stock Ownership Plan (ESOP) as an option for selling your firm. In our opinion, the ESOP option is fraught with pitfalls. First, if an ESOP fails, the business owner does not get his money. MANAGEMENT by John Zoller & David Bowen, Zoller Consulting, Inc. V O L U M E 5 0 I S S U E 5 O C T O B E R 2 0 1 7 47 47 V O L U M E 5 0 I S S U E 5 O C T O B E R 2 0 1 7 Second, as employees often do not have cash, payment is usually over time and time is risk. Finally, former employees must learn to be business owners and the focus of a business owner is much different from that of an employee. In this article, we will be discussing how to prepare your business for sale, but we will not be discussing valuation. Previous articles have addressed valuation. An important concept of this article is that dealership owners, regardless of when the time to sell occurs, need to undo harmful practices that will cause the business to sell for less than it is worth, or not at all. What is it that gets a buyer excited to buy your business, and more importantly, what causes a buyer, after looking at your business, to say no thanks. TOP 10 WAYS to Prepare Your Business for Sale The PART 1 OF A 2-PART ARTICLE Seller Advantage Buyer Attached – The business is part of his or her soul, the business is his or her baby. a Detached – For a buyer, particularly for a sophisti- cated buyer, it is just a deal. Unrealistic Expectations – Sellers often have a "pie- in-the-sky" attitude about the business' value. a Just the Facts Please – Buyers look at potential ac- quisitions in strictly financial (or strategic) terms. Inexperienced – Most sellers have never gone through the process of selling a business. a Experienced – Many buyers have been through the acquisition process one or more times. Because sellers and buyers have different perspectives about the business, most often, the buyer has the advantage over the seller. Why Continued on page 48

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