If you are a business owner, you undoubtedly know about the many rewarding aspects of this line of work. You also know, however, just how stressful and difficult it can be. If you are ready for a new challenge in life, you may be considering exiting your business to find something new. For most business owners, this isn’t just something you can rush into because it will impact many other people including employees, vendors, customers, and more. If you do want to exit your business, make sure to consider these resources and strategies to avoid any issues.
Create a Succession Plan
Whether you are looking to exit your business as soon as possible, or just want to be ready for the future, a succession plan is essential. This type of plan will help you to choose a potential successor and ensure the company is positioned properly for the transition. This written plan can serve as a checklist for what you need to do and how to do it to prepare yourself and your company for your exit.
Appraise Your Business
It can be very difficult to know how much to ask for when selling your business. This is compounded by the fact that when you own the business itself, you will tend to price it higher. With this in mind, you may consider having a business valuation performed so you can get an objective report on the true value of your business. Alternatively, a consultation with a CPA or business intermediary (i.e., investment banker or business broker) can help you understand the value and/or the market for buying/selling a business like yours.
Get Your Financials Squeaky Clean
This is good advice whether you are selling your business or not, but it is absolutely critical when looking for an exit. Anyone who is thinking about buying a business is going to want to look closely at the financials to ensure they know what they are getting into. Having your books updated and managed properly will make it easier for buyers to evaluate the company, and also make the transition much easier. Likewise, having well kept financial statements may help you understand the critical drivers to your business, which, if improved from that point forward, can increase the price you get for your business.
Share Responsibilities and Dial In Your Processes and Procedures
In the months or years leading up to selling your business, try to offload some of your responsibilities to trusted employees. This will help minimize the impact your leaving will have. Additionally, it will make the transition much easier on whoever buys the business. The more of your workload you can share, the better off things will be. Obviously, this requires processes and procedures, preferably in writing. This will also help ensure that a new buyer can step into the role of owner and continue with the existing operations of the business.
Work With an Attorney
Selling a business is a huge legal undertaking and one that you want to make sure is handled correctly. Having a business attorney on your side will help with negotiations, writing up contracts, and much more. Please contact us to schedule a consultation to learn more about how we can help.