2020 is fresh, and hopefully so are your eyes for the future. Whether you’re a resolution setter or you’re still trying to find an intention for the year, planning is a must-do for success in your business. If you’re a small business owner, maybe your resolutions include selling your business and starting an all new journey.
No matter where you are on the path of small business ownership, a clear exit strategy for your business should be a top priority. Without a proper plan, you could undercut years of hard work. So, how can you take full advantage of the fruits of your labor?
Based on 4 decades of experience in buying and selling businesses, here are our top 3 tips for making strategic moves toward a successful sale. These are the exit strategies you need to work on in 2020.
1. Analyze Your Success vs. Industry Success
Depending on your record keeping, proving your success to potential buyers can be tricky. Having clear and complete financials is the key to proving your business’s worth. Once your books are in good shape, you’ll be able to get a better idea of how you stack up within the industry so you can market your business appropriately.
Exit Planning Goal: Set up reliable systems for bookkeeping, and make sure past records are easy to understand. Consider converting paper files to digital, and take extra care with reports around cash flow.
2. Get a Third Party Valuation
Trying to guess what your business is worth won’t cut it if you’re serious about maximum return on investment. A true valuation by a third party organization gives the credibility you need to present to sellers. This valuation will also help you set expectations of return, and help you plan your next move.
Exit Planning Goal: Put aside savings each month that will help fund professional help. Interview companies that can complete a valuation, and set a timeline to complete one at least 6 months before you’d like to exit your business.
3. Contact a Business Broker
Setting up a business for sale is no small task when you’re also running the day to day, and there are many pieces of the process that are best handled by someone else. Working with an effective business broker provides you with the guidance you need for a smooth transition, while you continue to do what you do best--run the business. A good broker will provide a blueprint for selling your business and tried-and-true methods for properly timing your exit.
Exit Planning Goal: Work with a business broker to set up a custom plan for your exit. Do this early, and use this plan as a reference for all of your business activity in the year(s) to come.
There are many more steps to successfully preparing your business for sale, but help is out there! Ensure a lasting legacy for your business' success with a team who works for you and your business by CLICKING HERE for a no-obligation meeting with an experienced business intermediary.