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12 FEDA News & Views Editor's Note: Having sold his material handling business nine years ago, Past FEDA Speaker Gary T. Moore is intimately familiar with the rigors of transitioning to the next phase. Below he shares questions to consider and steps to prepare before making the big move—or not. A n educated look at FEDA's mem- bership directory suggests that a significant number of ownership transitions will take place in the next decade, due in large part to the size- able percentage of dealerships owned by baby boomers. As a member of the baby boomer leading-edge class of 1946, I sold my Denver-based material handling distributorship in 2006. So, when is the right time to sell? As was reinforced to me in the deci- sions leading up to the sale of my company, this is a very personal deci- sion. Everybody's situation is different. Nevertheless, there are some common decision parameters. In this article, I pose questions and concepts for distrib- utor owners who are considering sell- ing as part of their exit strategy. At the end of the article, I'll also suggest some things that can be done to prepare, even if now is not the time for you to sell. For most, the decision to sell, or not, will be the most important financial decision of their lives. What are your professional and personal objectives—and have you achieved them? Owners of distributorships usu- ally start or buy them to accomplish both personal and professional objec- tives. What are yours? Have they been achieved? If so, have you set new ones? In some cases, owners achieve their objectives—then continue to operate their businesses out of inertia, without new objectives. A common personal objective is to achieve financial independence. Have you achieved personal financial inde- pendence through the distribution of profits, or will you need the proceeds from the sale of your business? If you sold today, what would the value of your business be? Is your financial situation still at risk through personal guarantees? Professional objectives are often more varied. Mine included setting a standard of professionalism for our industry, both nationally and in our geographic area; helping identify and offering opportuni- ties and training for a next generation of lead- ership; and operating a business that was "fun" to work in, for most of the people, most of the time. At the time of sale, I felt these profession- al objectives had been met. Are you still having fun? Many distributor own- ers I have talked with, both in material handling and other industries, have said something like, "When I stop having fun, I'll get out." Of course, no business is fun every day. But, on balance, do you look forward to going to work most days? Do the fun things outweigh the daily hassles? Is your attitude in and out of work basically positive? Is your work negatively impacting your attitude "on the outside?" Are you still seeing the opportunities and challenges more than the problems? When to Sell Your Business Show me the money!! When it's time to sell, owners want to maximize their financial return. The return, not only on the money invested, but also for the late nights and weekends worked; for the family times missed; for the late night callouts; for the risks taken; for the personal guarantees signed. A positive business cycle for the econ- omy and business acquisitions usually mean higher purchase offers. It also can mean your business is making more money—so why sell? This leads to the next question: When is the next business down cycle likely to occur and how might that affect offers as well as problems you will face? If you're not ready to sell this busi- ness up cycle, should you be taking steps now to be ready in the next up cycle? What are the risks of selling? One risk of selling is "seller's remorse." That is, regretting it later. Avoiding this is one reason to involve appropriate personal and professional advisors, and family, in discussions to ensure that full consideration is given to alternatives. Another risk of selling is not getting your money. I know of a number of sell- ers of material handling distributorships who chose the wrong buyers and didn't get all their money in the end. Another reason for professional advisors and due diligence by the seller is regarding the quality of the buyer. By Gary T. Moore continued on page 14 I know several owners who waited too long to sell—and then missed a business cycle; or got into trouble; didn't see issues with their suppliers (which was devaluing their business); had health problems (which caused distress sales)...