SETTING SAIL: The Pupfish Cafe

Janette is in the middle and Taylor, the new owner, is on the far right

It is important to share all transitions in business – not only how business owners start and run their businesses but also how a business owner navigates out of business. Janette Bachman, founder of the Pupfish Café in Bishop, CA, has been a Paul Terry & Associates client through her small business ownership journey. It started in a UC Berkeley business class with a business action plan. Then there was a business start-up, an expansion and finally, her business exit. We met with Janette to ask her to reflect on her experience. What inspired her to start her business, what were her lessons learned; how did how she manage her eventual business sale?

Was it a long-time dream for you to operate a café?

Not at all! I grew up in a small ranching town in Colorado. The local coffee place was a dingy, smoky establishment that served food to all-night drinkers and truckers. In high school, I had a part-time job there waiting tables. I never thought that one day I would own a small cafe myself.

When did the inspiration hit to start your own business?

I moved to California for college and eventually became a project manager for a contracting firm. I took design classes and learned scheduling, billing, and estimating. It was great paying work, and I was able to buy a house in Oakland. However, eventually my work was really not making me happy. It seemed everybody was always trying to get something for nothing. Then my office re-located to South San Francisco – and that was going to be a longer commute. It started me dreaming about what else I could do.

When did opening a café become your small business dream?

I became a fan of “third wave” coffee shops where the owners knew all their customers by name. I just liked the feel of those places, I began volunteering at a café on weekends and visiting cafes all over the Bay Area. I started to think more seriously about the idea of a café of my own. I realized that as a seasoned project manager, a cafe was just another “project” that I could manage well. I was ready for an adventure.

What were the key elements to opening your café?

I moved to Bishop, CA and opened the Pupfish Café in May 2016. The key elements for me were all the help from friends. Friends convinced me to rent the space in the back of Spellbinder Books. They helped paint its walls to resemble an aqua marine environment where Pupfish might thrive. Other friends helped me manage the social and set up the original website. Other friends even helped make coffee and sandwiches in the early days.

What was the most satisfying part of business ownership for you?

My favorite part of the cafe was interacting with customers – many of whom became good friends. It was also satisfying to add more products, create good internal systems and hire some good employees. However, the most satisfying part of having the café was seeing people come in, talk with each other, and stay to hang out. I purposely kept slow internet and had only one place to plug in to make it a place for interaction instead of work.

What made you ultimately decide that you wanted to exit the business?

I got burned out from all the years of being the sole proprietor of a small cafe in a small tourist town – and especially with the pandemic. Staffing issues became the final straw. I knew it was time to find a new owner. It was a struggle to find people with the right balance of skills and passion for my small business. It was time to let the business go.

What were your goals for selling the business?

I wasn’t focused on selling the business for the highest price. What was most important was that the cafe continued – for both the community and the bookstore where we shared space. So, I needed to find the right person to buy it.

How did you go about finding potential buyers?

I spoke with a few trusted business owners who I thought might be interested. I was looking for someone with energy, youth, ambition, and commitment. In the end, I focused on making the sale to one specific trusted employee. I knew that she was interested, ready to tackle it and would be the best option to maintain the cafe.

How did you assess the value of your business and the asking price?

My first step was to assess what the equipment and fixtures were worth. Then I estimated just how much I would add to get the price I wanted and that would be fair and affordable to the buyer. I had already made significant improvements with equipment, refrigeration, and tables/chairs. It was important to me to sell a turnkey operation.

What were some of your most important lessons learned in selling?

It could have helped us to focus more on paperwork. However, I was selling the business to someone I knew – a past employee and friend, and we negotiated on a “trust” basis. We didn’t involve any lawyers, accountants, or business brokers. This is just what we did to be open and fair – as we simply trusted each other.

What type of help/support did you need and/or did you get during the sales process?

Most of my support came from my business consultant, my bookkeeper, and two business volunteers. I also had support from local friends who provided practical help in tracking inventory, prepping the space with the bookstore people, and transferring marketing information and more. In short, I got a lot of help! I was not alone!

How did you communicate your exit decision to your employees, customers, and suppliers?

I gave staff and suppliers 3 weeks’ notice. We started social media postings and making new signage in the shop. During the transition weeks to the new owner, we put up signage in the cafe so that people who were not aware of the change could see what we were doing and that we were coming back.

How is the café doing now? Are you still involved with the new ownership in any way?

The café is going great! Taylor, the new owner has improved food presentation and she’s making excellent baked goods, quiches, and more. Because of her, there is a whole new crowd of people who have discovered the café. I help with the QuickBooks data entry and offer practical help with catering quotes, sales tax filings, etc. Now, she is running everything on her own and is 100% owner.

Are you happy, given the circumstances, with your decision to sell?

In hindsight, I wish I could have managed my staff better. I could have been quicker to let people go who were not good employees. I miss the day-to-day interactions with local customers and the out-of-town folks. It was a blast getting to know people and making friends. Ultimately, I am pleased with the outcome of the business sale. Now I am back to doing project management work – remotely so I can live and enjoy this great community.

A Mid-life Awakening: Blake Joffe of Beauty’s Bagels

2017 – owners of Beauty’s Bagels
and now post ownership

In 2009, Blake Joffe and his partner Amy Remsen moved to Oakland from Philadelphia on a whim, in search of a new city to call home. They fell in love with the Bay Area’s friendly people, beautiful landscape, and amazing food. (Blake was a chef in Philadelphia and after their move worked at Delfina in San Francisco as chef of their pizzeria.) They loved their new home but there was one thing they particularly longed for (aside from warm summer nights): amazing bagels! Armed with their culinary experience, love of food, and desire to work together as a family business, Blake and Amy opened their own bagel shop in 2011 to bring Montreal-style, traditional bagels to the Bay Area. They named the business Beauty’s Bagels to pay homage to the iconic Beauty’s Luncheonette in Montreal.

Starting as a pop-up, Blake and Amy quickly grew the business. They opened their first shop in Oakland’s Temescal neighborhood in 2011 and later a second location in Oakland’s Uptown neighborhood in 2018. Running this family business was a labor of love and it took a lot of labor – Blake’s and Amy’s and a large crew of employees. After nine years in operation, they were ready to take another big leap; this time away from small business ownership.

In September 2020, Beauty’s Bagels Shop was acquired by Wise Sons Delicatessen, with Blake and Amy joining the Wise Sons team as culinary director and manager of people and culture, respectively. The acquisition brought two of the most prominent players in the Bay Area’s bagel and Jewish food scenes together. The merger allowed Blake and Amy to take advantage of different strengths and culinary perspectives, offering an even better experience for their customers. The merger meant there would be some small changes to the Beauty’s brand, but their mission remained the same, to bring the nostalgia and love behind their food to a new generation. Wise Sons started selling Beauty’s smoked pastrami and sliced rye bread in their Oakland storefront, which was reopened with a full menu of familiar favorites.

The benefits of the acquisition were obvious for Wise Sons, as the addition of two East Bay storefronts to Wise Sons’ five existing Bay Area locations made the newly formed Wise Sons/Beauty’s team a formidable force. Now that Beauty’s and Wise Sons merged, there was a more comprehensive HR program and efficient operational systems behind the scenes. Wise Sons, as a larger company, had the resources to provide such structures. Joining the Wise Sons fold provided a bit more security for Beauty’s employees and ownership.

Ultimately, though, Blake and Amy, decided that they needed to step away from the business all together and make a larger mid-life change.

I asked Blake (who was a Renaissance business planning student and client of mine) to talk with me about selling his business and ask him to share his advice for other small business owners contemplating a similar transition. Here is my interview with Blake…


INTERVIEW WITH BLAKE JOFFE

What was your vision or inspiration for being a business owner in the first place?

I had run restaurant kitchens in the past and wanted to craft a culture and business with my partner Amy. We loved serving people and wanted to do it our way. The bagel shop experience was a big part of my upbringing and I wanted to pass those memories onto a new generation. It was fun, we enjoyed working together and the business did very well.

Do you think being a business owner helped you address personal goals or ambitions?

Yes, I think becoming business owners made us grow up quickly. It also showed us that we could do anything we set our minds to. We developed new personal and business skills as the business grew and we hired more and more people to make the business function better and to provide the services that were being requested by customers.

Why made you decide to exit, and did you have goals in exiting the business?

Mainly managing employees was the on-going and consistent issues for us. We were tired of the never-ending employee problems, difficulty finding morning bakers, and the burn out for all of us. Our goals in exiting included fair compensation for our work and the brand building that we did over the years, but we also wanted our business to live on.  We also recognized (after the sale) that that would not happen unless we worked in the business. So, we were okay with letting go and moving on.

How did you go about finding potential buyers?

We were lucky enough to have a friend/business owner who we knew, trusted, and had a similar brand to us. Our company was easily incorporated into theirs. I had spent a lot of time with this friend and often voiced our displeasure about owning this business. At one point, they finally heard us and offered to buy us out. We were happy and ready to consider this option.

How did you assess the value of your business and choose an asking price?

We spoke to a valuation analyst and tried to figure out what our company was worth by analyzing our financials. We calculated what we wanted and negotiated from there. In the end, it was what the buyer was willing to pay, and we were ready to sell.

Did you make improvements or change your business model in order to be ready to sell?

No, we transferred ownership of the business at the beginning of the pandemic which made it easy to make changes since everyone in the restaurant industry was scrambling to make changes. During the business sale process, we learned about all the ways that you can make money by selling your business that you should put into the contract. For us it was the inventory, the brand, the equipment, and the pre-trained staff. We received cash and stock in the business, and we were happy to do so.

What were some of your most important lessons learned during the sales or sales negotiation process?

We were negotiating before the pandemic and had a dollar amount that we were happy with, but once the pandemic hit, I thought the sale was off the table and made this apparent to the buyer. That probably lowered the sale price once we settled. So, the advice I would offer is keep your cards close to your chest even if you are negotiating with a good friend. Our attorney was invaluable in making sure that we received as much as we could.

Are you still involved with Wise Sons or are you over and done with that relationship?

We’ll always be in touch with Wise Sons. We have been friends with the owners for 10 years now. They are currently paying our loan back that we took out to fund our second location. Our payment is connected to Wise Sons and this business connection keeps us close and well informed.

What advice would you give to other small business owners thinking about selling their business?

We felt like even if we didn’t get nearly the amount of money we wanted for our business, at least we are happy with what we’re doing now. To us, that’s the most important thing!

What are you and the family doing now?

We are living in Mexico and plan to stay for one more year.  We negotiated working with Wise Sons but realized after some time that we were still burned out.  However, we are both very happy with our mid-life awakening!

What advice would you give to others who are planning to be a small business owner?

Be prepared! Don’t rush through your business plan, it’s literally your plan to open a successful business – this is the time to work out, on paper, as many challenges as you can think of. Also, be prepared to bust your ass but make sure you have an exit strategy to remove yourself from the day to day business operations. Keep learning new skills. 

Ownership Transition at The Good Life

The Good Life Grocery, a beloved San Francisco natural food store on Potrero Hill (since 1974) and in Bernal Heights (since 1991), is entering a new era of leadership! Last year Lester Zeidman retired from the business after 40 years as co-owner. Long-time employee and General Manager Samantha Zuvella has joined Lester’s wife Kayren Hudiburgh as co-owner of the business. Small business ownership transitions can be difficult, yet through a gradual, step-by-step approach The Good Life Grocery made this transition comfortable and seamless for the owners, employees and customers alike.

We interviewed new co-owner Samantha Zuvella about her experience working with The Good Life Grocery and becoming an owner. (You can learn more about Lester Zeidman and his retirement in this article from the Potrero View.)

Lester Zeidman, Samantha Zuvella and Kayren Hudiburgh

How long have you worked for The Good Life Grocery? I have worked at GLG for over 18 years. It was my first real job when I was a teenager in high school, besides babysitting. I was excited to work in the neighborhood where I lived and at a job where I could meet new people. I liked the everyday challenges and excitement of the grocery business and there were a lot of opportunities for growth. I wanted to be financially independent and live on my own, and I knew that I had to take on every opportunity to obtain more responsibility so that I could earn a higher hourly pay.

How has your role in the business changed over the years? I was hired in 2004 as a Courtesy Clerk (or “Bagger”) at the Potrero location. From there I become a Cashier, then a File Clerk for Accounts Payable, and then the Store Supervisor. Lester then trained me to become the Accounts Payable Manager for both stores. This role was a great fit with my education from San Francisco State in Business and Accounting, and I took over payroll and monthly financial reconciliations. From there I was promoted to Assistant General Manager at the Bernal Heights store and then Store Manager at the Potrero store, which involved managing both the Grocery and Deli Departments as well as Customer Service. In 2016, I become General Manager, overseeing the management at both locations while keeping all of my financial responsibilities. I became a minority owner/partner of the business in 2021 and 50% owner/partner in 2022. I continue to work as The Good Life Grocery’s General Manager and CFO.

What inspired you to want to be an owner of the business and when did you start to consider it? In 2013, I almost left the business to work for a much larger organization that was offering me higher pay and lifetime benefits. As much as I loved working at Good Life, I didn’t see the future in it for me at the time. I gave Kayren and Lester my resignation notice and told them I would be leaving in a few months. Their reaction to me wanting to leave made me reconsider, and I started looking at GLG as my lifelong career rather than a first job. 

Since then I knew I wanted to become the owner of the business one day and I have worked towards that goal ever since. Kayren and Lester made it clear that they wanted the business to live on well past them. We started talking about how that could happen. I have also cared deeply about the employees that I work with every day. I knew that if I could become an owner, I could give others some of the opportunities that Kayren and Lester gave me. I could help employees become financially secure, feel connected to the business, and proud of themselves and their accomplishments.

Since becoming an owner, have your thoughts or intentions about small business ownership changed? No, because I’ve actually been thinking like an owner for several years. I have worked closely with Lester and Kayren to manage the business and I’ve seen the challenges that small business owners face. I have been fully committed to this job and the success of the company for many years prior to becoming an owner.

Ownership transitions can be a stressful time for any small business and a lot to figure out. What do you think made this transition successful? There is so much trust, respect, and patience between the three of us. Also, we’ve all had the same goal – for The Good Life to continue to thrive as a successful business for many years to come, bringing the community together with good food and good people. Becoming an owner was a business transaction but it felt personal and emotional. I’ve felt like I am making Kayren and Lester proud. I am honored to have their trust and to have been given this opportunity Also, Paul Terry was a major help with the ownership transition, too. He facilitated necessary meetings, kept records of agreements and kept us on track with deadlines and working towards our goal. Without Paul’s hard work and help keeping the wheels turning on this transition, it may not have happened! Ultimately, it was the combination of a solid relationship and the attention to all the details that made this transition a success.

How did the pandemic affect the business? The pandemic brought positive light to grocery stores as essential businesses and our customers were very appreciative that we were there for them every day without fail during some really scary times. The pandemic also brought us waves of employment applications and qualified candidates wanting lots of responsibilities. Supply chain issues are really what affected us the most. We weren’t able to get our everyday products easily so our buyers worked extra hard to find other options from other suppliers to keep food staples on the shelves for our customers.

On a personal level, how do you manage through these challenging times? I try to take it day by day when the job feels overwhelming. I have always been a person that likes a challenge. It is overcoming those challenges that is most rewarding. The feeling of getting through it, working with a team to find resolution, and then finally accomplishing the goal are worth all of it.  I am a goal setter, and though it may take me longer than expected to accomplish the goal, one day, I know I will get there. Other than my family (I am married with two kids under 5 years old) and my close relationships, overcoming challenges at GLG is what brings me joy.

What should people know about managing a grocery store that you think they don’t? There are a million different pieces to the puzzle and sometimes the pieces change sizes. We are constantly trying to figure out how to rearrange the puzzle to keep it complete. Having a strong team and the ability to be flexible is extremely important. Every day there is something new. Our employees are our biggest asset. Investing in them helps them feel connected and committed to the business. Many employees may never see grocery as a career opportunity but there are some who find out along the way that this is their passion and they want to learn it all.

How is business doing now? The Good Life Grocery isn’t going anywhere! We are working hard to offer our customers the best shopping experience. We are proud to say that we will soon be offering online shopping options with pick-up or delivery service. I want our customers to know that we will go the extra mile to find the product they are looking for. If it is not in our stores, we can special order it. We welcome feedback and we encourage customers to request items that they would like to buy in our stores. Most customers don’t know that we also do special order catering. We can do anything from a pasta dinner for 100 people, to a beautiful charcuterie board cheese platter for the holiday table.


A Successful Family Business Ownership Transition

Every small family business faces unique challenges and unusual choices unlike other small businesses.  This is particularly true when the founder(s) or current business owner(s) decides to explore if they can transition away from a management role, reduce their ownership share, leave the business (and/or perhaps consider even consider selling it to a non-family member). However, in order for a smooth transition of management oversight and/or business ownership from one family member to another, there are some important considerations that everyone needs to face.

  • Is the current owner willing to give up “control” of the business?
  • Will this existing owner be open to the business changing under new management?
  • Is the potential new business owner(s) sensitive to the founder’s needs related to control and change?
  • Will the new family member(s) taking over the business be as passionate about the business?
  • Will the new owners have the commitment and competency to manage this type of business?
  • Can the business “pay” any price/value of the business requested by the departing founding owner?
  • Is there a transition  plan that both the out-going and in-coming owners can create together?

These are several considerations that all need to be addressed and solved.  No small feat!!

Transition is a process

First, it is essential to understand that effective ownership succession is a process. It takes time to ask all the key questions, gather all the critical metrics and develop a plan  – and for everyone to feel comfortable phasing in or out of the business. Unless there is a reason why a transition must happen in a hurry, it is preferable that the current owner take time to slowly phase out of their role, and the new owner(s) slowly phase in. The most successful ownership successions happen over years not months.

Communicating about the business to all generations

If you plan to pass your business on to the next generation, consider engaging them in the business in positive ways  – from an early age. It can start just by talking about the business in ways that will give them an appreciation for the work that is done and the impact that it has in the community. There may be times when they will see you and your business struggle.  So be sure they also see what you love about this business and why they might, too. When they are ready and able to work in the business, can you frame it as an opportunity instead of a requirement or a burden? (Just because someone is your close relative, does not mean they want the business as much as you do.) Ideally this starts with a relationship built on trust.  You can both be honest about what you want for yourself and for the business.

Setting up the next generation for success

How do you reach a point where the next generation is passionate about the family business and you feel comfortable putting them in charge? Each family business is unique and there are many paths to answering this question. Here are some ways to get there:

  • Give the next generation important opportunities to work in the business. Ideally years before an actual succession takes place, the next generation should be getting experience in the business, perhaps even working different jobs and in different departments.  You want your family members to develop their skills.  You want them to get hands-on experience as well as learn about the culture of the business and start understanding the business inside and out.
  • Encourage the next generation to follow their outside interests. You want the next generation to want to be a part of the family business. Though it might seem counterintuitive, there can be a lot of value to the family business in having the next generation explore their passions and get work experience elsewhere. They will gain skills and build their confidence and get the chance to create their own identity as a working person in another business environment.  If and when they decide to return to the family business, they will bring those skills and that confidence with them, and the family business will be all the better for it.
  • Key tasks and delegation.  Each family member wants to find their own place in the operational structure of the business.  This will help everyone understand how they fit into the business and to each other. This is especially important in a family business with both family and non-family employees. Existing employees also want to understand how the incoming family member fits into a particular role in the business. Will a new family member have goals; will they too have to listen to and take directions and also need to create metrics to measure progress.

    Key roles and responsibilities are also important for you as the current/departing owner.  The exercise of writing down your responsibilities can be a great way to take stock of all the things you do. What are the responsibilities and critical skills necessary to run the business? What parts of your job play to your strengths? What is most challenging? Writing out this “job description” can help clarify the job/roles for the family member joining the business, including what aspects of your current role you want to pass on first.
  • Give the next generation specific areas of responsibility. Are there specific aspects of the business where the eventual new owner of the business can sink their teeth into and make their own? By taking responsibility for one aspect of the business, they will get to develop their skills and implement their ideas within certain parameters, and you get to practice giving up control.  New members can take on new areas of growth; can become the head of technology or could apply their skills in financials analysis and/or making meetings work.
  • Share the challenges. It is important that you don’t shield the next generation from discussions about the challenging aspects of the business – when there is a loss of client; a production error or employees who must be re-trained.  This will give a more complete understanding of the business.  You would hope that they may bring some fresh ideas or new perspectives.  Invite them to share their ideas on ways to help the business in the short-term and over the long-term. Apply their solutions and see if it can be implemented and measured.

A changing business – timing is everything

The next generation may want to make changes to the business that will affect the way business is done or how technology is used. They may want to add new services or products to match a changing target market. You as the departing owner may see the value in certain changes and at the same time, it can be difficult to watch the business going in a different direction. This is a common tension for family businesses. The timing of how to “control” different aspects of the business get shifted, needs to feel comfortable for both the outgoing and incoming owner. If changes feel too fast, you, as the departing owner, may resist implementation and/or sabotage the change. If change feels too slow, the incoming owner may decide that this is not the right fit for them as nothing will ever change!

Letting go  – moving on

This may be the hardest step you as an existing owner will ever have to take.  It is understandable that after pouring your time, energy, sweat and heart into your business for years it can be very difficult to let go and let others take charge. The business has most likely been central to your identity for decades. The owner of this business is who you are in the business, within the community and within the industry in which you travel.  This “letting go” will be a very, difficult process.  It will require honest discussion with you and all others.  Then, there may need to be a written agreement on the stages of a transition and a timeline for getting there. Yet, once these decisions have been made, you will be able to create a framework for a successful transition.

Creating a succession plan – a peaceful transition

You and your family don’t have to stumble through succession planning alone. It should be a team effort with support from an accountant, an attorney, and a business advisor and/or mentors. They can help you set a reasonable timeline, guide you through the process, help you create a framework for the transition and understand how this leadership change will impact your business. Learning about other family business’ experiences with succession planning can be invaluable as well. Become a member of the Gellert Center to connect with other family businesses and get access to additional resources to help you on your succession journey!

The changing of the guard can be peaceful and very empowering for all concerned.  This is always an essential step for the long-term success of any business.  Drop the reins and let other family members take up the slack.  With a careful and in-depth plan, you will all be ready.  You will have people who are qualified to take over; they will bring energy, passion, and new, exciting ideas; the business will continue and grow. In the end, you will not regret it.  You not only started and have grown a successful business but determined how it will continue well into the future.

Good work, boss!

Learn more about how Paul Terry & Associates helps small businesses with ownership exit/succession planning.

This post was originally published on the USF Gellert Family Business Center website.

Selling Your Business – Essential First Steps

Are you thinking about selling your business? We assist small business owners with management transitions. For clients interested in selling their businesses, we help them focus on these essential first steps:

selling

1. Understand your business exit motivations

Why do you want to sell your business?  Perhaps you want to start a new business or focus on other pursuits. Maybe you are burned out, at odds with your business partner, or ready to retire. It is important to understand what is motivating your decision to sell your business. Your current perspective and emotional outlook can affect your approach to the sale and the timing of your business exit.

2. Prioritize your sales goals

It is good to start a business sale process with a clear idea of your desired outcomes. Are you looking to sell immediately? Is a high sale price the most important factor for you? Do you want to remain involved in some capacity? Do you have preferences for who buys the business? Do you want to influence how the business operates after you sell? Is a cash sale necessary or will you consider seller financing?  Clarifying what you want will affect the sales approach you take.

3. Assess your business’ current condition

Is your business a good sales prospect? Is your business likely to attract a buyer? Are there areas of the business that will need improvement before you sell?  When looking at each aspect of your business, you must try to understand the business from a potential buyer’s perspective. You need to consider your sales and profit history, the business’ financial condition and your products or services. For a brick and mortar business, look at your business location, your facilities and your equipment. To be a good sales prospect, your business may need to retain your employees and your clientele…and perhaps even you for three to six months!

4. Assess the current value of your business

How much is your business worth?  Valuing your business helps you set an asking price. There are different ways to determine the value of a small business. You will need to consider your tangible and intangible assets and the business’ prospects for growth. You can hire a business valuation expert to do a business appraisal or work with a business broker to request a Broker’s Opinion of Value. With recent tax returns and financial projections in hand, it may be sufficient to work with us to do some simple calculations to estimate a realistic amount.

Now you are ready

Once you are clear on your motivations, your goals, and the current condition of your business, you are ready for one of these next steps:

• Prepare to present a sale-ready business to interested buyers.

• Invest the time to make your business more attractive to buyers and increase its value. (This would start with an action plan and timeline for each area of the business that needs improvement.)

• Offer to sell the business at its current sub-par condition (knowing you may have lower interest and/or a lower sale price).

• Continue to operate the business as well as you can and close it when you are “done”, selling any tangible assets.


We can help! We work with clients through these initial business transition steps. We review the current business so you can consider a business sale. We help with business improvement action plans to improve the value of your assets (even if you do not sell right away). We help you compile the documentation necessary for a business sale. Learn more.

The Exit Planning Audit: Are you ready to go?

At some point, most small business owners will ask: What is next for me beyond this business?

“I want to pursue something new.” “I’m burned out.” “I wonder if I could sell this business.” “My family member or employee wants to take over, and maybe it’s time.” “Retirement sounds good!”

If you are having a similar thought, it may be a good time for a business audit. A business audit is essentially a business check-up — you are assessing the health of your business so you can make well-informed decisions about next steps. A business audit is a great management tool to use at any stage of business… ideally annually!

exit planning audit

An exit planning business audit is a tool to help you specifically evaluate your readiness for an ownership transfer and determine if your business is a good sales prospect. Will your business be attractive to a buyer or will it need improvement prior to offering it for sale? Is the business’ goodwill of high enough value to attract interested buyers, or are you better off selling physical/tangible assets and simply closing the business?

Here are some initial business audit questions to consider when exploring a business ownership transition:

Your business exit motivations:

  • Why do you want to exit your business?
  • What do you want to do next?
  • Do you want to leave completely or stay involved in some way?
  • Do you have any conditions for a business sale?
  • Do you have a vision for your business even after you aren’t involved?

The status of the business:

  • Do you have up-to-date financial statements that match your tax returns?
  • Have sales revenues and profits consistently increased over the past few years?
  • Does your business have a distinct competitive advantage?
  • Does your business operate with clear written procedures and agreements?
  • Can your business operate without you, or with you in a different role?
  • Does your business have opportunities for growth?

Your answers to these questions (and many more!) will help you determine the right next steps for you and your business, and the best timeline for an ownership transition.

A business exit can be complicated and we encourage you to start thinking about your business exit well in advance. You want time to consider what an exit would mean for you and your business well before you are ready to make this change.  You want a transition that won’t negatively affect your employees and the vendors, clients or customers reliant on your business.

Don’t wait until your business is struggling or you are desperate for a change before you act.  With thorough exit planning, you can improve your readiness to transition and the value of your business!

At Paul Terry & Associates we help small business owners answer the many questions related to ownership transition. We take clients through an exit planning audit — prioritizing business ownership transition motivations, evaluating the business’ strengths and weaknesses, and assessing the readiness for a business sale. Then we help business owners create a plan for a successful transition.

Learn more here!

A Successful Management Transition

Are you thinking about transitioning out of a leadership role in your business? Stepping away from your small business does not have to mean giving it up completely. It could mean removing yourself from day-to-day operations or delegating management responsibilities to someone else so the business can continue to function smoothly without your constant presence.

In any business transition—whether it involves a change of business ownership or just a change in management, we encourage business owners to consider these steps:

1. Assess your current business

Before making any big management change, understand the value of your business and the strength of your existing systems. Be sure to ask key questions and audit your business.

  • Have you built business assets (both tangible and intangible) that have value?
  • Do you know what your business is worth?
  • Do you have operational systems that can be understood by others in your business?
  • Do you have key employees that could take on increased responsibilities?

2. Address training and control

To step away from the business, your employees need to be prepared to take on more responsibility. You have to be ready to give up some control. If senior members are taking the reins, they need to know the details of the business and understand what will be expected of them. You may need to hire new senior management who must get up to speed and gain your trust (and your employees’ trust). Any new manager (or eventual owner) needs to understand the business inside and out and develop the skills needed for success. Your role will be to facilitate all of this.

3. Take your time

In any big business transition – whether a change in business ownership or a change in management – a thoughtful, step-by-step process is ideal, if possible. A gradual transition allows for a new manager/owner to grow into their role. It can take time to gain confidence and also credibility with all stakeholders. As time goes on, you will be able to assume a more advisory (or backseat) role. By then you will be ready for it. If selling your business is the goal, you will need time to prepare for the sale and find the right buyer. So… look at a realistic timeline and set the right pace for you.

4. Get help

It can feel impossible to focus on a future transition while attending to the day-to-day demands of the business. You are managing services, employees, cash flow, marketing and day-to-day operations. How can you focus on your transition goals when so many other aspects of the business need your attention right now? An advisor, support partner or support group can help you create a transition plan. They can also help you stay accountable to the plan within a realistic timeline. Other professionals such as an accountant or bookkeeper can help you understand the financial health of your business and the ramifications of any change. At some point, you will need legal help, too. Get the professional help you need to hold yourself accountable and make the right decisions.

5. Your identity as a business owner

As a small business owner, your whole identity may be wrapped up with your business. You may think you want a change but you may feel reticent about losing control of the business and the change of personal identity the comes with stepping away. Perhaps you would no longer have a reason to stay involved with a merchants group, or you may no longer be invited to participate in certain business networks. Without your business identity, you may need to redefine or reinvent yourself. This is an important step to take!

As a small business owner, you pour your heart, lots of time and often lots of money into your business to make it succeed. After this investment, you want to get the compensation you have earned and see your business continue to flourish after you step away. Creating a solid transition plan with a realistic timeline and a good support team can help make this goal a reality.


Paul Terry & Associates help small business owners with transition planning, which could mean bringing in a partner, stepping back from a full-time management role and/or preparing for a business sale. For clients preparing or a management transition, we help you: 

  • Work through the challenges related to change and new roles
  • Install effective management metrics and timelines for the transition
  • Hire or train committed management staff
  • Create financial projections and estimate value for any transition
  • Produce and implement an exit/succession plan

Learn more about our ownership transition services.

Business Exit… have you thought about it?

Many tech entrepreneurs think about their business exit from day one. Acquisition is central to their business model. But most small business owners don’t think about it… they are too busy getting into business! An exit plan should be a part of every entrepreneur’s business planning process — though this is the least understood part of the business plan, and often ignored.

business exit

Don’t wait. Think about a business exit now.

No matter how successful you are in business and how much you love our work, you should think about what will happen to your business when you no longer actively manage or run it.  At some point down the road—a couple of years or decades from now—you will leave your businesses (or your businesses will leave you). Personal circumstances might change or burn-out could happen. You may be ready to pursue a new endeavor or want to retire. Or someone could approach you about buying your business.

Business exit options

You may not be able to predict your business’ success, your future interests, or the direction of the marketplace. But you can start thinking about the business exit options that could be a good fit for you.

There are a variety of ways to exit your business. You could pass it to a family member, partner, employee or other business stakeholder. You could sell it to an outsider. You could liquidate it and sell the assets, or you could file for bankruptcy.

How will you figure out what is best for you and your business?

Envisioning the future

We encourage you to think about the future of your business and what it might look like when you are not at the helm.

  • Is your goal to create a legacy business that will last forever?
  • Do you ultimately want to pass the business on to a family member?
  • When you are ready to stop running the business, do you hope to sell it?
  • Would you want the business taken over by an employee(s), partner or other internal stakeholder or would you want to sell to an outside party?

The vision for your business will change as your business develops and circumstances change, but thinking about your business’ trajectory, including your exit, is a key part of strategic planning and business growth. (If you are in a business partnership, it is important that you have an ownership agreement, from the beginning, that spells out what will happen if one or more partners wants to exit the business.)

Planning your transition

When you are ready to think seriously about transitioning away from your business, you need a business exit plan. Just as a good business plan is an important part of business start-up, a good exit plan is key to a smooth transition away from the business.

We help our clients through the transition planning process. This includes identifying or clarifying your motivations and goals, assessing the current strengths and weaknesses of the business, and creating a role transition or business sale timeline with clear benchmarks. We then help business owners stay accountable to their plan.

Our goal is to help small business owners feel ready for their next steps, with a feasible and straightforward plan to guide them through their transition.  Learn more about our ownership transition consulting services.