When is it time? Time for what, you may ask? Time to move on. Time to stop and smell the roses. Time to play golf. Time to live in warm climates every winter. And most importantly, time to have the funds you need to live your life comfortably.

We call this the Ownership Transition Move - making the decision to sell, setting a timeline, then planning and executing to do it right. Sounds easy, but it's tougher than you think. This is especially true for contractors, since you may not have the classic customer relationships, the assets to provide equity value or the sophisticated systems and horsepower that manufacturers and distributors have available.

So how do contractors achieve this transition goal? Believe it or not, just like everyone else, just in a different way. Everybody selling a business has to have something to sell; they have to be able to value it at a reasonable (or "doable") value; they need a buyer or transition partner; and they need the financing to make it happen.

Assigning value
First of all, you need to determine what you need to live on and compare it to the amount you would have available, with the gap being filled from amortization of the estate. In short, you need to work backwards to see if it works. If not, that's a subject for another column.

Next, let's discuss value. We discussed "fair value" in a previous column ("Defining Equipment Value", December 2007), where we probably listed 20 definitions of the term. When valuing your business, it's not much different. We all know about business cycles and understand there are times to sell and times not to sell. For some of you, now is not the time to move forward. Yet, that should not keep you from planning and selecting a departure date.