Whether it’s time to sell or time to hand over the reins to the next generation, successfully exiting your business is just as important as entering it. It’s a process that requires planning, preparation and organisation to ensure the asset you have built truly displays its worth.
Here are three tips to smoothly exit business:
Every business has its use-by date in some form, whether it’s your retirement, succession, time for a new challenge or the optimum time to sell. Regardless of your reason for it, exiting should be part of your business plan.
As with all parts of business, if you consider exiting to be one of your goals, plan for when and why that might happen and make your exit a success. The worst mistake a business owner can make is to throw away the asset they have built by failing to be properly prepared to exit and failing to know when the time is right.
Get your ducks in a row
If you’ve ever seriously investigated buying an existing business, you will know that poor documentation indicates a poor business. The more work, a prospective buyer, has to do to ascertain the true value of your business, the less valuable your business becomes.
A business which includes a well documented plan, acknowledging its strengths, weaknesses, areas of improvement, solid figures and reasonable projections, is a business more likely to attract a buyer at the price you hope to attain.
Just as a proper business plan provides you as a business owner with clarity and a path to success, it allows prospective buyers to understand the value and potential of your business.
Selling or handing on your business is not an event which happens overnight, nor is it one that is likely to occur swiftly. A business changing hands should be an event that takes time in the making. As a business owner your job is to ensure your figures and documentation are up-to-date and that any staff required are in place to handle the changeover. Ask yourself a series of questions:
- Have I achieved my goals?
- Is my business in the best shape I can enable it to be?
- Are the right people in place?
- Is this business efficient?
- Is its further potential clear?
A solid business plan provides the answers to these questions and the route to attaining business success. Exiting should be part of this plan and supported by it. Then you can walk away knowing you have created an asset that was sold for its worth.