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Selling Your Business

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Selling Your Business

The Transition from Entrepreneur to Investor

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Your career as an entrepreneur may end the day you sell your business, but your investment career may be just beginning.

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Editorial Rating

7

Qualities

  • Innovative

Recommendation

Compiled by Louis Crosier and written by a group of investment and other financial advisors, each of whom contributed a chapter, this book thoroughly addresses every important question involved in the sale of a business, except the matter of finding a buyer. It focuses on financial planning, so the information on insurance, taxes, negotiations, deal structuring and the like is comprehensive and detailed. One of the more interesting chapters, however, addresses the emotional consequences of a windfall of cash. It turns out that the ancient sages were right: money doesn’t solve problems; it just substitutes new problems for old ones. getAbstract recommends this book to those who are considering selling their businesses. For readers who may have to embark on the problem-plagued life of a wealthy ex-entrepreneur, this book is a useful (although a rather dry) guide.

Summary

Preparing for Your Sale

Begin planning the sale of your company and choosing an advisory team long before you decide to sell. Ideally, start planning when your company has a low value. Decisions you make on such basic factors as the firm's initial structure can have an enormous impact on your exit strategy later. The five most important considerations in structuring your business are:

  1. Limitation of personal liability - New ventures are risky. Protect yourself.
  2. Flexible tax planning - Can you put assets in or take them out without tax penalties?
  3. Control and management - In a general partnership one partner's decision binds the other partners. A limited partnership provides some of the advantages of partnership while limiting some of the risks.
  4. Capital structure - Think short-, medium- and long-term. Corporations have access to the equity markets, but equity financing can dilute control. Consider issuing founder's stock, using shareholder agreements and other tactics.
  5. Exit strategy – Make it flexible and as easy as possible. You don't know when you...

About the Author

Louis P. Crosier is a principal at Windward Investment Management Committee. He oversees the firm’s investment consulting practice. He has worked extensively in investment management and consulting. He earned his bachelors and M.B.A. at Dartmouth College and holds a master’s in education from Harvard University.

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