The Global Summit of Women 2009

Santiago, Chile

May 14-16

Presentation on “Exit Strategies for Business Owners-

When is the Right Time to Sell?”

By Monica Smiley, Publisher & CEO,

Enterprising Women Magazine

Good afternoon and welcome to the workshop on exit strategies for women business owners.

We have a wonderful panel with us this afternoon who have been asked to share practical advice on how to evaluate the right time to sell your business, what factors you should consider before making that decision, how you make the sale a win-win for you and the buyer, and how you prepare yourself emotionally for the loss of something that is a part of you.

I’ve been asked to make some introductory comments to get the session started and this is a topic that we have written about in Enterprising Women Magazine, the magazine that I publish in the United States. So I would like to share some brief points with you on this topic.

In the United States, most women start businesses with one of three goals in mind. Many build their businesses around their lifestyle and in those cases, the business may or may not continue after the owner is ready to retire or passes away. In some cases, businesses are started with an intent to pass the company along to the next generation. Children, parents, and siblings might be involved in the business from the start. I have samples with me of a magazine we recently published that is focused on building and selling family-owned businesses. And finally, some business owners start businesses with the intent to sell the business—often as soon as five years later when the business can provide a strong return on the initial investment. Businesses in the high tech or science / technology sectors are often started with an early exit in mind. The business owner sells the business and often starts another business soon after. We call these women serial entrepreneurs and many own several businesses over their lifetimes.

Selling a business for a good price in the United States is a mark of accomplishment. We know, however, that in Latin America and many other cultures, the business may be family-owned and selling is sometimes considered to be a sign of failure. In any culture, executing the profitable sale of a business can be good for the business owner, employees, and everyone involved if it is handled properly.

Here are some quick tips that are drawn from a recent issue of Enterprising Women on the topic of selling or exiting from a business.

· Run a business every day as if it’s for sale.

· Be aware of your goals and parameters by knowing what is acceptable to you in a sale.

· Don’t publicize prematurely to employees or others who could be affected that you are considering a sale. When you are ready to sell, be decisive.

· Get the buyer’s promises in writing and find a buyer who shares your vision. Include conditions of the business and the sale in the sales documents.

· Develop your own investments and insurance portfolio separate from your business.

According to the Center for Women’s Business Research, a Washington DC-nonprofit that focuses on women’s entrepreneurship:

· Both men and women business owners believe that price is the most important factor to consider when selling your business, but women are more likely to also consider personal concerns about the future of the business and the well-being of their employees.

· Women are more likely than men to consider the buyer’s identity, personality and background when looking to sell their business. They are more concerned about what the buyer intends to do with the business in the future.

· Women business owners are nearly twice as likely as men business owners to intend to pass the business on to a daughter.

Women are typically more attached to their businesses and you would think that they would therefore be less likely to have an exit strategy. In fact, the opposite is true. We’re seeing women business owners with a growing maturity, and exhibiting a deeper understanding that they need to have a long term exit strategy in place for their businesses.

End of introductory remarks.

And now I would like to introduce our first panelist…

And now we would like to take questions from the audience. I have been asked by the Global Summit staff to remind you that we would like to keep questions focused on the topic of exiting or selling your business. If you could give us your name and company or organization affiliation before you ask your question, we would very much appreciate that.

If no immediate questions, get things started with some questions:

1) We profiled a Canadian woman entrepreneur in Enterprising Women who did not intend to sell her business, but she was approached by a larger company and was asked to name her price. Not wanting to sell, she pulled a number out of the air that was far higher than anything she imagined she could get for the business, and to her surprise, her price was accepted. The sale took place quickly and within a few weeks, she found herself wealthier than she could have ever imagined, but out of a job. She made a list of everything she had ever wanted to do in life, and worked her way down the list—from travel to purchasing a second home in another country. When she finished her list, she said “OK, now what?”

Well, we would all love to have such a problem, but I think her story points to the emotional upheaval that we don’t expect when suddenly we wake up in the morning—after working night and day to build a business—look at ourselves in the mirror and realize we have to make a big transition.

Would any of our panelists like to share their experiences on the emotional side of selling your business?

2) If you decide that the time might be right to sell your company, what are the first steps you should take to prepare for the sale?

3) How important is it to get good legal advice?

4) How do you know when it’s time to move on?