When the moment strikes that you begin to start thinking about how to exit your business, you will generally have many questions…
How much is my business worth?
How do I sell it?
What does that process look like?
What do I need to prepare?
Is my business sale ready?
Will the sale fund the rest of my life?
All valid questions.
However, most business owners seek the answers to these questions from a BUSINESS BROKER.
Guess what?…
A Business Broker wants to SELL your business, not necessarily work with you to prepare an exit plan, to make it sale ready. (I know because I get referrals from brokers all the time)
The best person to direct these questions to is an Exit Advisor.
An Exit Advisors job is to help identify areas of risk and opportunity in your business, tailor an exit plan to help remove the risks and in turn, lift the value of your business making it more attractive to potential investors.
What You Need to Know…
With this in mind, I thought I’d share FIVE critically important factors you MUST address before you begin the process of preparing your business to sell.
1. Manager on Deck: Who Runs the Ship When You’re Not Around?
A manager who can effectively run your business in your absence is a key player in making your business more attractive to buyers. Buyers typically prefer a business that doesn’t rely on the owner for day-to-day operations since it minimises transition risks.
If you don’t have a manager, it might be time to consider promoting one of your team members or hiring externally.
2. Show Me the Money: Do Sales and Profits Grow Each Year?
In reality, reliable and growing sales and profit trends are like catnip for business brokers and potential buyers. Before you think about selling, analyze those financial statements. Better yet, get your accountant on board, to help do some of the heavy lifting.
Highlight areas of growth and identify trends. A business that demonstrates consistent financial growth is always more attractive, reducing perceived risk for buyers.
3. Customer Service on Repeat: Is Your System Reliable and Repeatable?
Let’s be honest — potential buyers love a well-oiled machine. Do you have processes that are reliable and repeatable? Systems that promise consistent customer experience can elevate your business’s value.
Whether it’s how sales are processed, customer service is delivered, or inventory is managed, ensure these processes are documented and streamlined. This reassures buyers that the business can continue operating smoothly after they take over, even without your personal touch.
4. Don’t Put All Your Eggs in One Basket: Variety of Customers
Your sales shouldn’t look like a single customer’s shopping list. Diversification is the name of the game. Evaluate if you have a wide base of customers contributing to your sales or if a significant portion comes from just a few.
A diversified customer base reduces risk and enhances your business’s value. Consider strategies to broaden your number of customers if most of your revenue is from just a handful of clients.
5. The Great Business Exit: Timing Is Everything
An exit strategy isn’t just about walking away and remembering to take your favourite coffee mug. It’s essential to have a well-timed and thought-out plan. When do you plan to exit your business? Have you defined your financial goals?
Knowing these answers can help you streamline preparations and align with market conditions, putting you in the driver’s seat when negotiating the sale.
Your next move…
As you consider these factors, keep in mind that preparing your business for sale is like prepping for a photo shoot — you want everything to look its best.
And, to make it even easier for you, I’ve compiled the above into a handy e-guide that you can download below:
Does the above seem overwhelming?… It shouldn’t be.
The best time to start planning your Exit is NOW!
If you need help with Exit Planning advice, or have a question about the exit process, simply hit the “Got a Question” button below.
Does the above seem overwhelming?… It shouldn’t be.
The best time to start planning your Exit is NOW!
If you need help with Exit Planning advice, or have a question about the exit process, simply hit the “Got a Question” button below.
Ok, in my next email, I’d like to share how I helped a client recently go from answering THREE phones a day to working less than 10 hours a week (in under 6 months)
Until then,
