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Although there are four common ways to exit a resume writing business, in the vast majority of cases, one method is the most common: liquidation.
And that's too bad … because, in my opinion, simply closing your doors is the WORST thing you can do with your resume writing business. Your business is an asset — and just like many other assets, it has value, even if you are finished with it.
One thing that is sorely missing in the careers industry is a focus on business exit planning. Every business owner has to exit their business at some point. Some business owners exit their business through a calm and carefully planned exit. Others exit their business in an unplanned fashion when they hit hard times, or when they pass away. (I'd strongly recommend you consider preparing a professional will in case of a personal tragedy.)
There are great ways to exit a business and there are poor ways. A great exit will leave you with the maximum cashout possible with minimal hassles. A poor exit will result in your "asset" (your business) not realizing the value possible, while causing you a lot of stress.
Here are four common ways to exit a business, along with a brief analysis of each method.
Outright Sale
This is the most common kind of exit, and it works very well. You value the company being purchased, then the seller makes the purchase with either cash, stock, bonds or a combination of the above. This kind of sale usually allows the owner to realize a lot of value. Unfortunately, a very small number of resume businesses are sold, because the resume writer does not realize the value of the customer list they've acquired, and because prospective buyers don't have access to a list of resume writers who are thinking about exiting the industry (and, consequently, can't make an offer to purchase the business assets).
Mergers
Mergers are when two companies combine their strengths for a better win-win scenario. For example, when Disney acquired Pixar, that was more of a merger than an acquisition. Steve Jobs immediately became the largest shareholder of Disney and Pixar continued to produce the most important films in Disney's array of films. Mergers work a lot like acquisitions and are also a great way to realize value. However, I can't think of any mergers within the careers industry, perhaps because mergers are much more common in large companies than small ones.
Taking the Company Public
Another way to cash out of a company is to take the company public. If you're large enough, that means using an IPO. If you're a small company but want to go public anyway, a common tactic is to use a reverse merger. It's a very expensive process. I don't know of anyone in the careers industry who has taken their resume writing business public.
Management Buyout
Instead of selling to an outside party, with a management buyout the company is sold to the managers and employees instead. It can be sold for cash, or there can be some sort of owner financing involved. Because most resume writing businesses are sole proprietorships (single owner businesses), there often aren't managers or employees to sell the business to. However, I have heard of a couple of resume writing businesses where an employee buys the business. (The most high profile one is probably Susan Ireland, who took over Yana Parker's "Damn Good" business, which is now run by Beth Brown.) This is often an emotional decision rather than a financial one (and the selling resume writer often provides financing to the buyer).
Liquidation
This is the worst option of all — and, unfortunately, the most common in the resume writing industry. This is when you simply throw out any value the business has as an operation and liquidate the business for just its asset values. The assets are often computer equipment (which is converted to personal use, usually), business and career books and materials, and a customer list and files.
The business and careers books have value — although, often they are discarded (if they are more than a few years old, they can contain out-of-date information) or donated. Newer books can — and should — be sold to recoup some of the value.
But the biggest asset of the business is often the most undervalued — customer files and the customer list. These are individuals who have purchased a professionally written resume. There is value in that list of buyers. If you have significant traffic to your website or blog (you can check your PageRank – a measure of the importance of your website), selling your website also has value. A domain name may also have value — resume.com, for example, is an obvious one, but your domain may also appeal to a specific buyer.
So if you are thinking about closing your business, don't just liquidate. Put out the word that you're looking for a buyer. Or approach another resume writer who works with a similar clientele. Or contact me, and I'll try and help you find an alternative to simply shutting your doors.
