The five D's of owner exits

The owner dies and the family owns a business none of them run. They didn't choose to be sellers, and they usually can't wait for the right buyer. The business sells fast, and rarely for what it was worth the year before.

A lot of what made it worth more lived in the owner's head. The family can't hand a buyer what nobody wrote down.

An injury or a diagnosis takes the owner off the truck and out of the office. The business runs on habit for a while. Then it doesn't.

The fix here is the same thing that raises the price of any business: one that runs without you. A dispatcher who books the jobs, a lead tech who runs the day, customers who call the company and not your cell. We cover that in what your business is actually worth.

Half the business belongs to someone who wants cash, not a share of a plumbing company. The owner who wants to keep running it often can't pay out that half from savings. A sale is often the only clean way to split it.

It might be a slow year, a bad hire or a lost account. The owner decides to sell to get out from under it. Buyers can hear that in the first call, and they price it.

Of the five, this is the one an owner sees coming. An owner who starts getting ready before the slow year gets to sell from a better spot.

This is the one that gets missed. There are two partners, and one of them wants out. The one who stays can't afford to buy out the one who goes, so both of them sell, usually to whoever's ready that quarter.

If you own a business with a partner and you don't have a buy-sell agreement, this one is yours. It's a lot easier to agree on the terms of a buyout while you still like each other.

Being ready doesn't mean listing the business. It means books a buyer can read without you in the room, a spread of customers, a team that runs the day, and trucks that aren't due. Those are the same things that come up in diligence, and every one of them is visible a year out. The list is in what kills a deal in diligence.

An owner who does that work a year before a D arrives sells a ready business. An owner who doesn't sells whatever is there that week.

A family that inherited a company, or a partner who needs out, doesn't have time for a buyer who's still figuring out the loan. They need someone who can close.

Being that buyer means doing the work before the call comes. Know what you can pay, how you'll pay it, and what you'll check. Then when a seller calls, you can move in weeks.

We work both sides of that call. For a buyer, that means being able to close in weeks. For a seller, it means being ready a year before the D arrives.