Most business sales don’t happen overnight. A well-executed exit can take years of preparation, and the businesses that achieve the best outcomes are the ones that start planning early.
If you wait until you’re ready to sell, you might discover:
• Your financials aren’t buyer-ready
• Your business is too reliant on you to be attractive to buyers
• You’re unclear on the best exit strategy for your goals
• Your value expectations may not be aligned with what is possible
The good news is, by taking steps now (whether you plan to sell in two years’ time or in 10), you can strengthen your business, increase your valuation, and confidently explore exit routes that align with your future objectives, helping to make the process as smooth as possible when the time comes.
Find out what your business is worth today
An independent business valuation will not only give you an indication of the price that may be achieved; it will also highlight potential weaknesses that can be addressed and rectified before sale.
Get your financials in order
Buyers will scrutinise your numbers. Having clear, well-documented financials increases trust and speeds up due diligence.
Build a strong management team
If your business can’t operate without you, it’s harder to sell. Buyers look for a well-run operation with leadership in place who are committed to the next step of the journey.
Tidy up contracts and processes
From supplier agreements to employee contracts, make sure everything is up to date, legally sound, and easily transferable.
Assess operations
Businesses with efficient and well-documented processes are in in demand as buyers can see that it will run smoothly without the current owner.
Review your customer base
Reliance on a small number of key clients or contracts is a risk factor. If there is diversification that is readily addressable and achievable for the long term, it will enhance the financial attractiveness of the business.
Think about opportunities for future growth
The ability to expand into new markets, launch new products or services, or improve efficiency will make the business more valuable to a potential buyer.
A purchaser of your business is buying the future cashflows, not the ones in the past. A strategy which shows the continued growth of your business going forward will instil confidence in the overall transaction as well as the valuation of your business.
Understand your exit options
Whether selling to a competitor, passing on the business to your leadership team via a management buyout, or taking on board investment from private equity, each option can impact your legacy, employees, and financial return differently.
Your objectives as a business owner, and a person, are what should drive your chosen exit route. We can help you plan out what the future needs to look like and take you through the playbook of what each exit option can mean for you.
Want to start preparing, or would like to discuss a valuation? Let’s see where you’re currently at, and where you’d like to be heading. Get in touch for a confidential chat.