Looking to exit from your business in the next two to five years?
We can help you achieve the best outcome.

Looking to exit from your business in the next two to five years?
We can help you achieve the best outcome.

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Are you ready to sell your business? Part 2.

As you contemplate the final stages of your business ownership journey, it’s essential to ensure not only that your business is prepared for a potential transfer of ownership but also that you are personally ready for the transition. Our previous article delved into aspects of preparing your business, this article focuses on what you need to do to prepare yourself for this significant change.

 

Clarifying your goals

The first step in preparing for your exit from your business is to define your goals. While financial considerations are important, such as determining how much money you aim to generate from the sale, it’s equally important to consider other factors. Consider how and when you’ll receive the proceeds, the net amount after taxes, and any retention or performance criteria that may apply. You should also consider non-financial goals around timing and legacy.

 

Assessing your business’s dependence on you

Evaluate the extent to which your business relies on your involvement and whether that is something you want to change. A high level of dependency on you could affect its attractiveness to potential buyers and impact the transition process.  You may find it difficult to extract yourself from key processes or relationships so this takes time, not only for you but also those to whom your responsibilities will pass.  This reduction in dependency and hence your role may be dealt with differently if you intend to stay with the business after a sale.

 

Considering the impact on others

Reflect on how a sale will affect the people in your business, especially friends and family who may be involved. Additionally, if you’re one of multiple owners or shareholders, ensure alignment among all parties involved. Differing expectations between shareholders on money, timing, roles, and even the fundamental principle of exiting can create delays, and frustration and ultimately make an exit difficult to achieve successfully.

 

Exploring flexible options

Remember that selling your business doesn’t have to be an all-or-nothing decision. You have the flexibility to step back, change your role, retain a smaller shareholding, or even take on a chairperson role post-sale. Exits come in many forms so explore what works best for you.

 

Preparing for life after sale

Equally important is preparing for life after the sale of your business. Consider how you’ll find social and mental stimulation, where you’ll derive your sense of purpose, and how you can utilise your time, abilities, and experience.  Think about various post-sale opportunities that align with your interests and goals. You could explore starting a new business, helping others start businesses, serving as a mentor, volunteering in the third sector, or pursuing new hobbies and activities.

 

Seeking professional advice

While you may naturally seek advice on preparing your business for sale, don’t overlook the importance of seeking guidance on your personal readiness. Consulting with financial advisors, coaches and mentors can provide valuable insights and support as you navigate this transition.  Many have done it before – lean on their experience and take time to have these conversations.

 

In conclusion, preparing yourself for the sale of your business is just as crucial as preparing the business itself. Here’s a checklist summarising what we’ve covered in this article to ensure a smooth transition and embark on the next chapter of your journey with confidence:

  • Clarifying your goals
  • Assessing your business’s dependence on you
  • Considering the impact on others
  • Exploring flexible options
  • Preparing for life after sale
  • Seeking professional advice

This checklist will help guide you through the process and ensure that you are well-prepared for this significant milestone.

 

If you’re considering an exit or have questions about readiness, don’t hesitate to reach out. We’re here to help you navigate the process smoothly.

 

(Image sourced from Canva)

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Testimonials

Ian’s ongoing input has made sure that plans have not only been laid, but implemented, completed and analysed. Ian is an invaluable asset to our business.

Alistair Henderson
Managing Director, Tuplin

Downloads

We’ve written a number of guides on selected business subjects that will set you and your business in good stead for whatever future you may choose.

These are free for you to download and to make use of in your business, so please help yourself.