If you are running a business, you are investing your time, hard work and money in it. You would have worked very hard to make it what it is now and what it can be. But, there may come a day when you would have to retire from it, leave, close it or simply end this great journey of your hard work. The best word to use here is “your exit”. It is very important to plan that.
Below are the 5 important Steps to Plane your exit.
When is the right time to sell? It mainly depends on what type of business do you have? How long has it been operating? And how consistently does your business generate income?
On the other hand if your business has been around for a long time, you may have a better understanding of peak times and off times of your business. You may also have a better understanding of market regarding your business.
So you should keep the time under consideration as it is a very important factor while trying to exit your business properly.
A potential buyer will like to have a deep look into the financials of your business. You should keep your books clean and keep them in a way that they are easily explainable. Keep a record of at least three years or more. Every single dollar which has been taken out of the business and cannot be explained, may affect the sale of your business in a negative way.
So keep you books cleaned and ready for potential buyers to look. If the books are clean, it will give them a real peace of mind.
The complex it is to run your business, the less attracted is potential buyer. All the operations which are done in your business till the completion of the task should be very easy to understand for anyone or any potential buyer. They rather should be very standard operations than being complex ones. In this way they can smoothly run your business after you.
Having a procedural document explaining your business operations might be very attractive for any buyer. It may be necessary for some complex businesses. So take some time to analyze all the operations taking place and the time required for each of them to complete.
So keep your operation standard and easily understandable for anyone.
Again, it is important what has been said above about procedural documents. You role in the business may be typically functional. You may be representing your face as a company’s brand. But, while trying to sell your business; you should uncouple with some of such things. In this way, a new owner can easily come and take over.
Define your role in the business in detail. This may also be the part of procedural document as we mentioned above. Having that in place a new buyer may know exactly that what are going to be his duties as an owner here.
You will need to review all the vital arrangements and agreements which your business has. Then share them to the new owner so that he can decide whether or not they will continue with those arrangements or agreements, and if they are willing to continue with those agreements then how are they going to be transferred?
Proper exit plan starts with awareness. Knowing that, what a buyer will be looking for when he is interested in buying your business. After that all you have to do, is to put all needed things together in place and make sure that all needed information and things has been taken care of.
Whether you have sold a business before or not? You should consider working with experienced Business Brokers. They can walk you through all the important and required steps. In this way, you would not be caught off guard.
CBC Business Brokers Sydney
Level 34, AMP Centre, 50 Bridge St, Sydney NSW 2000
T: 1300 661 498