Devising An Exit Strategy For Selling A Business

When starting a business, many business owners are working so hard in the day to day operations to get their business established that the thought of selling it is usually the furthest thing from their mind. However, an exit strategy is a crucial element every business owner needs to consider, if that is, they want to exit the business on terms favorable to them.  If a business owner has a plan to exit the business when it achieves certain performance goals they will have the best chances of receiving highest price for their business. Without a plan many business owners are left to sell their business at a less than optimal time, reducing the profit they might receive. (Click here for the most common reasons business owners sell their business)

The 6 P’s: Prior Planning and Preparation Prevents Poor Performance

An effective exit strategy takes planning, knowledge and preparation.

Get Your Financials In Order

Providing clean, understanding financial statements such as Profit and Loss Statements, Balance Sheets and Tax Returns will add value to your business, and give you better chances of closing the sale. Put yourself in the buyer’s position, would you be willing to pay top dollar for a business which could provide a clear picture of it’s income and finances. Accurate and clear financials will give your buyer more confidence to move forward with the sale. Some of the more important people to speak to regarding your exit strategy include: your business broker, attorney, CPA, and financial advisor.

Operations Manual

Well documented systems and procedures provide evidence to a buyer of a well run company. Your operations manual is crucial to enable the buyer to take over the running of your business in the shortest amount of time possible, and give him the greatest chances of success. Consequently your operations manual adds great value and desirability to your business.  Not only that, but a good operations manual helps you with hiring and training new employees and creating a continuation plan in the event of a major illness or death of a key employee.

Extract Yourself From The Business

The definition of a business has been defined by ActionCoach as a profitable commercial enterprise that runs without you. This is the goal for every business owner. If your presence is necessary for the day to day operations of your business, it makes it much harder to sell and more importantly reduces the value in the eyes of the buyer. As an added benefit having a great team and management structure in place will make your time at the helm more enjoyable and your quality of life with be greatly enhanced.

Educate Yourself On What Factors Are Important In the Sale Of A Business

Knowing what makes your business more valuable enables you to work on creating more value for your business. Talk to your business broker about how a business is valued? What aspects of a business are most important to a buyer – assets, cash flow, sales, customer list, patents, trademarks, your competitive advantage. By working on the areas that will make your business more attractive to a buyer will make your business much more desirable and give you the best chance of selling your business, in the shortest time possible, for the highest possible price.

More Benefits….

Preparing your business for sale, even if you are not intending to sell it, will actually improve the performance of your business and make it more profitable and enjoyable while you are the owner.

Take Action

Are you thinking about selling your business? Don’t delay, take action and speak to South Florida Business Broker Denis Berger about selling your business and the steps you can start taking now to sell your business effectively. You can call Denis at 561-676-7601 or Contact us