Some say that you only get one chance to make a good first impression. In business, you get one chance to make a great exit. Your business exit strategy is an important aspect of business ownership. If your business experiences a summer slowdown, now is the perfect time to start putting together an exit strategy. Having a plan in place before you are even thinking about selling helps you make better decisions that will make it easier to sell your business.
Failure to plan properly for the sale of your business will cost you time and money. Despite this fact, many business owners do not put an exit strategy in place because the process is time consuming and overwhelming. Here are three things you can do this summer that will help you start planning for the sale of your business.
Think about when you are most likely to sell your business. Is it in 5 years? 10 years? Then start to document what needs to be in place before you decide to sell. A few things to consider are
- Management and employees that can operate the business without your presence,
- Systems and processes that make it easy for someone to assume business operations,
- Ensuring outstanding tax and legal issues are resolved, and
- Tax implications of selling the business.
Think like a buyer
Take a step back and look at your business with the same lens that a buyer would. What would you change or improve if you were buying the business? Are there any aspects of the business that would give you pause or make you ask for a price reduction? Make a plan to address those issues moving forward. Some of the areas to focus on include
- The condition of the premises and physical assets,
- The current business model,
- Organization of records and documentation, and
- Earnings, profits, and cash flow.
This is a good exercise to do annually. When you work with us to plan your exit strategy, we will provide you with additional tools and resources to help with this part of the process.
Get your business appraised
A business valuation conducted by a qualified business broker will provide an excellent foundation upon which to start building an exit strategy. A business valuation determines the current fair market value of the business by assessing earnings, assets, property, goodwill, and more. Acuity Business Group takes the valuation process a step further by identifying potential weaknesses and giving you a plan for eliminating them. If you are only going to do one thing this summer for your exit plan, it should be getting a business valuation.
You get one chance to exit your business successfully. If you take the time to do it right, you are more likely to be successful. Ignoring exit planning will cause stress and disappointment when the time comes to sell. Give us a call to talk more about exit planning and to get a strategy in place.