For most business founders, the decision to sell their business will create feelings of stress and uncertainty. Here are four ways business owners can prepare for a sale and ensure a smooth exit:
1) Conduct a Detailed Financial and Operational Review
Conducing a detailed financial review will help you to identify any challenges you may face during the sale process. These reviews are beneficial as it provides you with insight into what strategic decisions need to be made and why.
Tip: involve legal counsel or a trusted advisor at the earliest stage of this process. Set attainable goals together and benchmark expectations to carry you through the duration of the sale.
Determining the value of your business early on is imperative to running a smooth sale. Having a solid valuation in place will allow you to engage prospect acquirers in deep dive discussions. Keep in mind, your valuation will fluctuate depending on which type of acquirer you are negotiating with.
Tip: be mindful of the consequences of undervaluing or overvaluing your business. The end goal is to maximize profitability and minimize risk, having the right valuation can guarantee both!
3) Evaluate Potential Acquirers
Weigh out the pros and cons of each type of buyer and exit strategy. Investing time and effort into vetting prospect acquirers will correlate to your success and satisfaction.
4) Jump Start Succession Planning
Despite which type of exit you are looking to achieve, having strong successors in place is imperative to a business’ long term profitability. Not only can succession planning give you confidence and comfortably to exit your business, it also increases the business’ attractiveness to prospect acquirers.
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