Introduction
Julie Cole, co-founder of Mabel’s Labels, knows firsthand how crucial succession planning is when selling a business. Cole started Mabel’s Labels in the early 2000s with a simple goal: to create a business that allowed her more flexibility to care for her child diagnosed with Autism. What began as a basement operation flourished into a $12-million-a-year company producing high-quality name tags for clothing and personal items.
Despite Mabel’s Labels' success, Cole recognized the need for an exit strategy. Eventually, Avery Products Canada approached her and her partners with a buyout offer. Though the sale brought new opportunities, Cole’s journey highlighted important lessons for business owners considering selling their businesses.
Lessons from Julie Cole's Experience
Cole’s story emphasizes preparation and professional support. Here are key insights for business owners planning their exit strategy:
- Stay Organized: Keeping accurate records and up-to-date bookkeeping is essential. Cole credits her team’s organized records with helping secure the valuation they wanted, even during a time of significant business reinvestment.
- Seek Professional Guidance: Financial planners, accountants, and lawyers play a critical role in navigating tax implications and structuring deals effectively. Cole’s collaboration with her accountant helped her align the sale with her family’s financial goals while minimizing tax burdens.
- Understand the Timeline: Business sales can take months or even years. From finding buyers to completing valuations and negotiations, patience is key. Cole advises staying prepared for delays or even the possibility of deals falling through at the last minute.
- Be Ready for Transition: Selling a business often involves more than handing over the keys. Cole negotiated a one-year salaried transition role, which extended to nearly five years as she helped the company thrive under new ownership.
- Stay True to Your Vision: Throughout the process, Cole prioritized preserving Mabel’s Labels’ brand, employees, and Hamilton facility. Structuring the deal to align with your values can ensure a smoother transition and maintain the legacy of your hard work.
Expert Advice for Business Succession Planning
Krystal Van Westerop, National Manager of Women in Enterprise at TD, offers practical advice for those preparing to sell or transition their business:
1. Start Planning Early
Timing is everything. Begin planning your exit strategy years in advance to strengthen your financial position and attract potential buyers. Strong records and consistent profitability can significantly boost your business valuation.
2. Build a Professional Team
Engage experts to guide you through the sale process. A financial planner can provide tailored advice for succession planning, while accountants and lawyers can ensure the sale is both efficient and tax-smart. Van Westerop emphasizes that cutting corners on professional help can lead to costly mistakes.
3. Prepare for a Long Process
The sale of a business is rarely quick. Finding the right buyer, negotiating terms, and completing the necessary steps can take between five months and two years. Planning ahead minimizes stress and ensures you’re ready for unexpected delays.
Planning for Success After the Sale
A successful transition requires both strategic and emotional preparation. Selling a business can feel like "selling your soul," as Cole puts it, but aligning the process with your values can make the experience more rewarding.
By staying organized, seeking expert advice, and planning early, business owners can navigate the complexities of selling their business while safeguarding their legacy.
This article is written for educational purposes.
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