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The Keys to A Successful Business Exit with Laurie Barkman, SmallDotBig LLC

The Keys to A Successful Business Exit with Laurie Barkman, SmallDotBig LLC

November 23, 2022

If you’ve built a successful business, you’ll already know that it requires a lot of time, planning, and effort. But do you know what it takes to conduct a successful business exit? Laurie Barkman joins us this week to explain why you should start thinking about your exit many years before you actually want to leave your business and to provide an overview of the steps you need to take to make the transition as smooth and beneficial as possible. 

About Laurie Barkman:

Laurie Barkman (the “business transition sherpa”) is the founder and CEO of SmallDotBig LLC (where she is helping owners maximize the value of their company and guiding them through the complex process of letting it go), Adjunct Professor of Entrepreneurship at Carnegie Mellon University Tepper School of Business, and host of the Succession Stories podcast. 

In her book, “The Business Transition Handbook,” Laurie provides a clear and practical guide for business owners considering leaving their ventures. With real-life stories, tools, and exercises, this invaluable resource prepares owners to successfully navigate the emotional and practical aspects of the transition process. Her actionable insights empower readers to exit on their terms, avoiding succession regrets and ensuring a smooth and valuable transition of their businesses.

For a comprehensive book review, check out this page.

How to plan for a business exit?

Strategic planning and careful analysis are necessary while planning for a business exit. Here are some tips to help you plan for a business exit:

  1. Define your goals: Begin by clarifying your personal and financial goals for the exit. Determine the exit timeline and the desired outcome.
  2. Assess the business’s value: Conduct a thorough evaluation of your business to determine its current value. Seek out professional assistance to ensure an accurate valuation.
  3. Identify potential exit options: Explore various business exit options available to you, such as selling the business, passing it on to family or management, seeking a merger or acquisition, or considering an IPO. Evaluate each option based on your goals, market conditions, and personal preferences.
  4. Assemble a professional team: Engage experienced professionals to help you throughout the exit process. This may include lawyers, brokers, accountants, investment bankers, and tax advisors. Their expertise will ensure a smooth and successful exit.
  5. Address legal and financial considerations: Review and address any legal, tax, and financial implications associated with the exit.
  6. Identify potential buyers or successors: If you decided to sell the business, identify potential buyers or successors who align with your goals and values.
  7. Negotiate and execute the exit: Negotiate with interested parties and take into account both financial and non-financial terms. Work closely with your professional team to navigate the legal and other aspects of the transaction. Once agreements are reached, execute the exit plan while ensuring a smooth transition for employees, customers, and other stakeholders.
  8. Plan for life after the exit: Prepare for your post-exit life by considering your financial situation, personal goals, and potential future endeavors. This may involve wealth management, retirement planning, or exploring new business opportunities.

Remember, planning for a business exit is a complex process that requires careful thought, professional guidance, and sufficient time. Start early, remain flexible, and be prepared to adapt your plans based on market conditions and other factors.

Episode highlights:

  • Just like building a business, exiting a business takes a lot of planning and a lot of teamwork. Letting go is a process, and you want to start evaluating and maximizing value while time is still on your side. A lot of businesses never get sold; they just close down. So plan ahead to ensure that doesn’t happen to yours! (05:55)
  • Before exiting, it’s important to create a vision of what your life is going to look like afterward so that you don’t lose your identity when you sell your business. (31:08)
  • If you want your business to be transferable, make sure you have a documented process of how your business works so that people other than you can do what you do. (42:08)
  • Be patient with yourself! Being a business owner means there’s always something more to do, but be easy on yourself; you don’t always have to be in control. (46:53)

Laurie’s best advice for entrepreneurs:

“Being a planner, being proactive, is a good thing. If we’re always running our business looking in the rearview, how are we able to move forward?” (11:46) 

Connect with Laurie Barkman:

Book Mentioned:

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Affiliate Disclaimer: Some links in this episode are affiliate links. If you make a purchase through these links, we may earn a commission at no extra cost to you. Rest assured, we only promote products/services we believe will benefit your entrepreneurial journey.

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