The Ultimate Success Of A Business Sale May Just Hinge Upon The Robustness Of Its Succession Plan

The Ultimate Success Of A Business Sale May Just Hinge Upon The Robustness Of Its Succession Plan

It can be said with some certainty that most entrepreneurs and business owners don't put a lot of thought into the end of their career when their business is thriving. But failing to have a well thought out exit strategy early in the journey could cause significant complications when a business owner decides to sell the business and exit.

There could be a variety of reasons that a founder decides to sell. Family emergencies, creating time to build a new business, wanting to capitalize on the value they’ve created, or sometimes it’s just time to move on. The motivations or situations triggering a sale could be any number of very unique circumstances. 

The Role Of Succession Planning In Preparing To Exit

Whatever the reason, it is crucial for founders to know their “why” when they set out to sell their business. And if their reason includes exiting the company completely, a well-thought-out succession plan could be the difference between a successful sale and a failed deal.

According to Forbes, robust succession planning is a major consideration when exiting a business. And among the top reasons succession plans fail is because new leaders haven’t been given adequate time to be properly mentored and prepared to take over the business.  

Buyers are reportedly uncomfortable with businesses where founders or owners are the only points of contact and control every aspect of the business. They would typically need assurances that the remaining management team can operate the business even after the owner departs.

It can also be essential to make sure that key management team members understand the plan ahead of time, and know their roles in the organization under the new business owners - as they will likely be the ones with access to important company documents and processes, and can assist with crucial steps relating to the sale process.

Any uncertainty arising from an unexpected announcement of the proposed sale of the company could result in team members feeling insecure and taking steps that may jeopardize the pending transaction.

The Role Of Experts Is No Less Important 

Selling a business is a complex and lengthy process that requires extensive industry expertise regardless of the value of the sale. 

Large value business acquisitions or mergers often involve investment banking firms. For example investment banking firms Goldman Sachs Group Inc. GS and JPMorgan Chase & Co. JPM advised on deals valued at over 2 trillion dollars last year, according to Statista.

Companies like Exitwise are in the space of advising founders on mergers and acquisitions in the lower middle market, and are reportedly sought out by business owners for their deep expertise during every stage of an exit journey. 

The Michigan-based company says it focuses on serving founders and business owners with annual revenues of up to $ 250 million in more than 200 industries. 

The company reports that its leadership has founded and sold multiple companies. Founder and CEO, Todd Sullivan has more than 20 years of experience founding, growing, and selling technology companies in Silicon Valley, Chicago, New York, and Detroit.

Exitwise says it has indexed hundreds of investment bankers, M&A attorneys, wealth advisors and tax accountants by average transaction size, success rate, and exit value. Exitwise’s mission is to leverage this global network of M&A experts to create exceptional outcomes for its founder clients.

To learn more about Exitwise visit its webpage.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

Featured photo by Mikhail Nilov on Pexels.

Posted In: ExitwisePartner ContentGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.