When should you begin? How about day you started it? To coin one of the famous statements from Stephen Covey, ‘start with the end in mind’
Many business owners are hesitant to start planning for the sale of their company. They may not know how to value their business, or they might think that there is no need since they aren't ready to sell it yet. However, you should never put off pre-exit planning, and here's why: 1) You will have a plan in place when you do decide to sell your business; 2) Your exit strategy will be more cohesive with your growth strategy; 3) The time invested now can help create a highly profitable and attractive business today and a retirement asset in the future. The business will be worth more in the long run if it has a planned exit strategy.
Here are some ideas to get you started today
Evaluate your business for strengths and weaknesses.
What are some of the areas you should be evaluating? Try starting with your systems and processes. Make sure your company has some standard operating procedures so that everything runs the way you want it to. Also, so that your customers have a consistent experience. Think Disney, Starbucks, Nordstrom; they all have an experience that is consistent every time. These types of systems also make for a smooth-running business today.
Why would they want to buy YOUR Business?
What is your competitive advantage? What makes you different from the thousands of other businesses out there? Is your branding well known in your space and community? Do you have a consistent stream of ideal customers knocking on your door? Many of these business features make it attractive to your future buyer in knowing that the business will be able to continue making money after they buy it AND they make a great business today.
When would you like to sell your business?
Do you want to sell when you retire in 10-15 years or do you want a quick liquidation event? The longer time you have to plan and organize your company the better the price you can get for it. When you have an exit plan in place and the business is running optimally, the choices become yours. Even if an unplanned problem arises and you need to sell it, you are still in the driver’s seat because the business is in sale-ready position for the next owner to take it over.
These ideas can help you determine if the business is ready for sale now or what areas of your business should be improved to attract more buyers. If it appears that changes are necessary, make them before you put the company on the market. By preparing earlier rather than later, you will increase its value and ensure a smooth transition when you are ready to go to market.
If you want to get started with your own pre-exit planning right away, contact us at Trajectory Consulting - we would love to help! (949) 229-2112