Looking back at a long career in the lumber business, you’ve decided it’s time to put the company up for sale. But what options should you choose?
Well, it’s happened: your 50-plus year career in the building materials industry is winding down. While it’s a decision you fought tooth-and-nail for the past decade, you’ve come to realize that this retirement thing people your age are doing might be better for your health than running your single-location, small-town lumberyard. With help getting increasingly harder to find and markets fluctuating as they are, your financial planner suggested maybe now is the right time to start looking for an exit while you can still get out and see the world outside your lumberyard.
Of course, you’ve always known this day would come. At nearly 75 years old, you’ve wondered often over the years what might be the best way to move on from the business. Since you don’t have children or other family members interested in taking it on, your options have turned to selling to a nearby competitor, placing your store with a broker who will seek out interest from consolidators and other potential buyers, or exploring some sort of employee ownership program.
Since starting out with your dad after a year of college, you’ve changed offices once—from yours to his. Over the decades you’ve loved your company more than some of your family members (not always, but sometimes), so it’s extra hard to see it go. On one hand, your financial planner says you might get the best offer from a national group that buys up and operates smaller yards. On the other hand, selling to a local competitor will leave your customers and your community with a company you’ve always thought was a fair and formidable operation. If you had more hands, the third would hold the employee-ownership option, something you want to explore as a means of taking care of the core group of team members who have become good friends over the years.
It’s still early in the process, but your financial planner, whom you have trusted with your company and family finances for years, says he’d like to get the ball rolling while your business remains strong. He is pushing for an answer on which option you’d like him to pursue first.
What should you do?
– KEEP IT LOCAL. Sell to the longtime competitor. You may not get as much as you’d like, but you trust that they’ll take care of your team and your customers.
– FOLLOW THE MONEY. Choose the option that will deliver the biggest payday, while working to ensure that your team and your customers are taken care of. Then go enjoy your retirement!
– EMPLOYEE OPTION. The core group of employees who have been with you the longest know the business best and deserve to profit from it long after you’re gone.
– NOT SO FAST. Your health is good, you still love coming to work, you have money in the bank, so what’s the rush? Agree to let your financial planner explore options, but don’t sell until you’re ready.
