Thinking of selling your business one day? Here’s 5 things you need to be doing right now
Exit Strategies. Hands up if you’ve ever given any thought to how and when you might like to sell, retire from or pass on your business. I’m betting there’s a few of you waving hands in the air. A few who have a carefully scripted plan tucked away awaiting it’s yearly review.
I’m also willing to bet there’s a few of you out there just like me. Whose main plan was to grow a business large enough to put food on the table and a roof over our heads, too caught up in the day to day to think about an exit. But if that is you, too busy to plan, drop everything because now is the time to think about what comes next.
These days we (my husband and I) have a fairly complicated business structure, but once upon a time things were pretty simple. We started a small business, business A, with the intention of growing it just enough to support us while we worked on developing products for a separate business, business B. Eventually business B would take over.
At the time our exit strategy was that when we no longer needed business A, we’d simply shut it down. But it didn’t work out the way we planned. Firstly, business A didn’t want to be shut down. We’d built a database of customers who had begun to rely regularly on the services we provided. And secondly, be-cause if we were to have a successful launch of business B, we needed cash.
So now, quite a few years later, we’ve found ourselves sitting in front of a business broker facing the harsh realities bought on by our lack of planning. Some of the things our broker needed we’d done by sheer intuition. But others would require us to virtually go back to the beginning, back to pounding the pavement. Looking back isn’t a good place to be when you’re business, and neither is delaying your future to fix your past. But it could have all been avoidable with a bit of early planning;
1. Teach Your Business to Run Without You
Businesses that are not reliant on the owner sell much more quickly and easily. Many buyers aren’t look-ing to be tied down to their purchase. This was something we’d ‘planned’ for by happy accident.
As we grew business B and it took us away more and more, we began to contract work out and eventual-ly we had someone working with us on a full-time basis. This meant we were able to help our customer’s transition away from us well before we’d even considered the business changing hands.
2. Write, Refresh and Keep Business Plans Up to Date
We had business plans, but they were completely outdated. As a general rule business plans should be reviewed anywhere from quarterly to yearly. By doing this you’ll not only save yourself time and money at the other end, but it’ll mean rather than just existing, your business will always have direction.
3. Find and Use a Good Bookkeeper and Accountant
There are some things you can do yourself and some areas where you need the help of an expert. In my opinion this is where you need to bring in experts.
Our books were good, up to date and ready for sale. Bad books can slow everything down and cost you time and money whether you’re planning to sell or not.
4. Refine Your Brand
Do you have a brand? If not, start building one! We have a brand that had become fairly recognisable in the local area, but we’d let a lot of things slide. We were no longer wearing uniforms and our print media and website had become dated.
Whether you’re looking to sell or not, refining your brand or your image is key to not only growing and maintaining a profitable business, but selling a profitable business.
5. Keep Growing Your Business
The first thing our broker told us when we walked through his door was “No matter what we talk about here today, when you walk out it’s business as usual. Purely from a dollars perspective, bigger more profitable businesses are worth more money.”
We’d been winding our business down, so now we find ourselves going back to the future. Don’t be like us. If you’re operating without an exit strategy or a plan for the future, you may be leaking money you don’t even know exists yet. Think about implementing these simple 5 steps now to start you on your way to a successful sale and profitable future.
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About the contributor:
Lee is an Entrepreneur, Mother and Blogger. Together with her husband, they co-founded and co-direct a software company, Lasso Systems and a hardware company Lasso Computers. Although the Lasso group are her main focus right now, she also own and run, and is an adviser and board member to several other small-medium businesses. Lee is passionate about her family, small business and writing. She is documenting her journey on her blog Business Makes Three. Website: https://businessmakesthree.wordpress.com