Thinking of selling your business? Nailing your exit plan is key
Updated: Feb 7, 2020
After building your business from the ground up, putting in all your time, effort and resources, you’ve developed a strong business model and your business is thriving. Now it’s time to put your business on the market.
So you’ve decided you’re ready to sell – now what?
You’ve no doubt spent many long hours of hard work building your business over the years. Now the first thing to do is to get professional advice and execute a detailed and structured plan that allows the most effective way for you to exit the business.
Have a think about how to attain the best valuation for your business in marketable terms. You’ll also need to present an exciting business proposition and vision that is supported by the premise of longevity, sustainability, opportunity and profitability. In order to achieve this, ask yourself the following:
Do you already have a plan to exit the business?
One thing most valuable to business owners looking to sell is a successful exit strategy.
Exit planning involves creating a strategy to successful exit your business. It should help you address and answer financial, legal, personal and business questions involved in the sale of your business. Having an exit plan means operational management decisions will take into account the long-term impact of exit on the business. The exit plan should include steps for cleaning the business to make it as appealing as possible and “ready for sale”.
What time scale are you working to?
The development of short and long term business goals helps map out prospective exit timeframes and allows you to foresee the future profitability of your network, allowing you to take advantage of the most successful exit possible.
While preparing to sell can take time, it’s important that you organise your business structure, financial records and customer base to make the business more marketable. Determining a realistic timeframe to ensure you can implement the necessary processes will help provide a seamless transition for the buyer, allowing them to easily enter the business without critically disrupting business processes.
How much can be organised ahead of time?
As a business owner, I’m sure you already understand the importance of looking to the future. So here are the elements of your exit strategy that can be organised ahead of time:
Getting the business ready for new ownership
Start by smoothing over internal procedures, putting in place best practice management and viewing the business from a buyer’s perspective.
Try asking yourself the following –
What makes my business different?
What would make a buyer want to purchase my business?
What are my business’ strengths?
What do existing customers like about my business?
Cleaning up daily operations
Take a look at how your business operates on a daily basis, focusing on top-level procedures and really get to know how these are implemented down through your business. This will help you understand how a new owner would take on existing operations.
Preparing or updating operation manuals for future management and owners
Closely studying your operations manual will really help you understand your business. Doing this will highlight advantages and selling points. Make sure to update your manuals to ensure that the new owner carries the voice of your business effectively.
Have your business valued by an industry specialist
It is important to really understand the current market value of your business in order to achieve the best sale. Having your business valued will set expectations for yourself as well as potential buyers. It will also give you a clear idea of what aspects of the business could be improved in order to increase its value and make it more appealing for buyers. Knowing your business’ value and using it as a guideline can also help you during negotiations.
What are your selling choices?
There are a number of selling options available. Some potential buyer groups include:
External buyers –
Outside of the business from word of mouth or advertising
Existing customer (usually someone n your value chain)
Internal buyers –
Management / employees, known as a Management Buy-out
Friend or family, otherwise known as succession planning
Previous staff members
There are a number of networks which you can advertise the sale of your business through including:
Lockwood Business Sales
Once you have decided you are ready to sell, we will work closely with you and your business to transition it through the steps for a successful sale:
We take a look at your business from the bottom up to ensure that it is in the best current position to sell.
We help you develop the most suitable exit approach for your business through analysing industry trends, the marketplace and your business cycle.
We collate the necessary documents for the sale process. This includes financial statements, tax returns, internal procedures and operational guides.
We prepare a tailored investment document that represents the opportunity in a professional, informative, structured and communicative way. This will help you attract real interested from the market.
Our team of business advisors and accountants work closely to develop and implement the most successful exit strategy to gain the maximum return for your sale. Get in contact with Lockwood & Ward and let’s plan ahead and develop a strategy for you. Call us today on 02 9299 7044 or send an enquiry to firstname.lastname@example.org.