How often have you received some direct mail, an email or a call suggesting, ‘Now is a great time to sell your business’? If the suggestion catches you on a bad day, you might be tempted to respond with a cry of, ‘Yes, get me out of here!’
However, unless you really plan to sell – and, more importantly, unless you’ve been planning to sell – it’s best not to act on impulse.
Preparing for a better outcome
Business owners achieve a better sale value with some exit planning. The trouble with ‘exit planning’ is that it sounds as if it will either stop you getting on with running the business or involve loads of unproductive paperwork – or both.
The reality is the process of actually selling your business is a separate activity from ‘preparing to sell’. In fact, preparing for a better sale outcome is no different to improving the way your business is run and boosting its profitability – and a better-run, more profitable business is something you want as a business owner anyway, regardless of if or when you want to sell.
If that’s the case, why not get on with improving your business performance right now? You and your business will reap the rewards – whether you decide to sell or not.
Planning your exit
Exit planning and preparing for a better sale outcome starts with a few key questions:
1. If you are the main source of new business, do you have a business development plan to reduce the dependence on you?
2. Can you identify who in your business will run the day-to-day operations if you’re not around?
3. Who are the key people in your team and how likely are they to be there in 12 months’ time?
4. If you’re a co-owner, are you and your fellow owners agreed on what you want the business to do for you, over what timeframe, and how you will do it?
5. Are the key players around your business committed to long-term relationships – from contracted clients, to retained partners and secured suppliers?
By putting a plan in place to address these and other questions, you can then consider when you might like to step back from running your business full time, what you’d like to do with your time, and what money you’ll need to fulfil those goals.
Whether your plans involve selling in the not-too-distant future, or in many years, you may value some business advice and support to prepare and help you. Ask us for a more detailed assessment of what your exit plan may look like, or find out more in our free exit planning white paper, Cash today, wealth tomorrow: Building the value of your business for sale.
You don’t have to feel trapped by business ownership, with some support and planning you can set yourself free.