Business Information for Entrepreneurs by an Entrepreneur

Has your company reached the tipping point? Businesses have their ups and down, and it is not uncommon for business owners to feel that they must take steps toward an exit strategy. There is more than one way to make an exit. Whether you sell the business, merge with a larger company, or sell shares of the company to the public, all of these exit strategies have their pros and cons.

Selling the Business

Selling the business outright can be a lucrative way to make a grand exit. If you have alternative sources of income, other business ventures, or another job lined up with a different company, this may be the perfect solution for you. Unfortunately, the current economic conditions might not make for as grand of an exit as you, the business owner, may have hoped. If your livelihood is completely dependent on the income your business generates, selling outright might not be the wisest exit strategy in a recession. However, once the economy rebounds, you may be able to sell your business at a price that is 3 to 5 times that of your annual income.

Mergers and Acquisitions

Mergers and acquisitions are great for positioning your company for diversification and growth. A larger company with additional resources and more man power may offer you unique opportunities for professional development and a chance to keep your entrepreneurial spirit alive. If you want to stay in business, but you know your organization cannot make progress alone, then a merger or acquisition might be just right for you. The downside to mergers and acquisitions is that you must make sure that you are able and willing to work with the partner organization. Explore their company values and practices to see if they align with those of your business.

Initial Public Offering (IPO)

An IPO is extremely effective strategy for raising capital and positioning your company to grow in remarkable ways. When successful, an IPO might provide you with the cash flow and leverage that you need to take your organization to a new level. This is a good solution if you are not satisfied with the current state of your company, and you are dedicated enough to initiate and implement change. However, IPOs are risky. They are not for the faint of heart. They are also not for business owners who are not ready to engage in a long period of transition and growth. The downside of IPOs is that they require a relatively high degree of risk taking.

No matter what exit strategy you choose for your company, it is important to weigh the pros and cons carefully before making a decision. Perform research and make comparisons to companies that are similar in size and profitability to get a realistic picture of your ideal exit strategy.

Are you ready to let go of the small business you worked so hard to create? Selling a small business can often be a lucrative investment. It might even set you up for success in retirement. Unfortunately, the current economic conditions present some special constraints for small business owners. There are several factors you should consider before selling your business. Take a look at some of these key points, and you might find out that waiting to sell your small business is in fact the right course of action.

Look at the Numbers

In the current economy, businesses are being bought and sold for much less than they are worth. The numbers and statistics speak for themselves. According to the nation's largest website for buying and selling small businesses, the average selling price for small businesses dropped 17% in the last year. The number of small businesses for sale also dropped 8%. If these numbers aren't depressing enough, the fact that the number of small business sold also dropped a whopping 36% in the last year, indicating that people just aren't buying right now.

Look at Industries

There are a select few industries that are not experiencing the effects of the current recession. These recession-proof industries, such as healthcare and certain specialists who contract with the government, are thriving despite the economy. If your business is not in one of these exceptional industries, then in the eyes of potential buyers, the future of it is uncertain. This translates into a lower selling price for you. Subsequently, it is best to hold onto what you have rather than putting it all on the line during a time when investors are only paying premiums for recession-proof companies.

Look at Unemployment Rates

Unemployment rates are a good indicator of the economic conditions and the viability of selling your small business. Unfortunately, the current rates have reached record highs. Not only does this mean that people won't take chances on buying a small business, but it also means that finding a job (if necessary) after the sale of your business will be a daunting task. You may be looking at a significant pay decrease if you sell your business and try to find another job.

Look at Retirement Options

Business owners who are looking to sell their establishments and go into retirement will find that cash flow and revenues have taken a sharp downturn in these difficult economic times. Retirement from small business ownership is often contingent upon the numbers generated from cash flow and revenues, therefore, it is best to be patient and wait for a turnaround before retiring.

If you hold your business through these economic times, then your selling price upon the recovery may be much brighter.

Small business owners often wish for 29 hours in each day. After all, you are much more than the proprietor of your business; you are responsible for human resources, office management, sales and marketing too. Wearing all of these different hats can make time management a nightmare- until you incorporate four techniques to better manage your time.

Start the Day on the Right Foot

The first thing you can do to revolutionize your time management skills is getting up early, much earlier than necessary to make it to work on time. In the morning, leave yourself an extra 30-60 minutes so that you can read the paper with your morning coffee, walk your dog, or whip up a healthy breakfast for yourself. These activities don't directly relate to your business, but you can recharge and calmly prepare yourself for the busy day ahead while the world is still quiet around you.

The Power of Lists

Writing and using lists can transform you into a more effective time manager. When you see everything that is ahead of you for the day on paper, you can begin to prioritize the items and outline your day. Things at the top of the list are essentials - the tasks you absolutely have to do with no margin for error. The important thing is that your list serves as a guide map for your day. It helps keep you focused, and you may find there are far fewer half finished projects around your business at the end of the day.

Divide and Conquer

The most successful business owners have learned to rely on the skills and abilities of their employees in order to accomplish everything on their to-do lists. Toward the bottom of your lists, you can place less essential items that you might be able to delegate to one of your employees (or put off until the next day if time slips away from you). Delegation is perhaps one of the most difficult things for a small business owner to do. However, delegation is also a primary key to successful time management.

Keep Work and Home Life Separate

As you make your lists and delegate tasks, you may often find items of a personal nature creeping into your mind. You must make a conscious effort to keep your work and home life separate. To successfully achieve this, you can reserve a specific time slot every week during business hours to attend to any personal errands you may have. For example, every Wednesday, you can take a 1-hour lunch break and run errands like pick up dry cleaning, go to the post office, make appointments for your kids, etc. By specifically allocating time for your personal life, you will find that the time you spend on your business is much more productive.

Not everyone is born with effective time management skills, but with cognitive effort, everyone can transform into a master of time.