Will Your Business Be Ready to Sell When You Are?
Spoiler Alert! All business owners will eventually exit their business!
Logically, this is obvious.
Practically, we find only a small percentage of business owners have a clear idea, let alone a plan, for leaving their business.
Few business owners can answer these 3 Key Questions:
1. When should I exit?
Surprisingly very few business owners have an "X Date." That magic date they've set for exiting their business. Reasons vary, however, what we hear the most often is:
For those that haven't defined their "X Date," there is an even more important question; Will Your Business Be Ready to Sell When You Are?
Not having an "X Date" isn't a bad thing; however, not having a business that is exit-able leaves owners, customers, and team members at risk.Life has a way of presenting challenges that interfere with plans; so the best plan is to prepare your business to run without you fulfilling any key position. This provides the ultimate freedom for exiting when needed, or when desired.
2. How will I exit?
If you want to avoid liquidating the assets of your business and closing the doors, you will need to ensure your business has the talent and resources to enable others to pick up where you leave off - regardless of the options you select for exiting:
By designing your business to get results without you, while you still own it, you'll have more options as you approach your "X Date" - or are forced to sell for unforeseeable reasons. Documented strategies, business plans, policies, procedures, systems and work processes will all contribute to your ability to choose when you exit.
3. How much money will I get when I exit?
Fact: The less your business depends on you for results and relationships, the higher value it has to a buyer. Owner dependency is a key driver of business value. Now is a good time to evaluate the degree to which key operational relationships with customers and suppliers depend on you. A quick 15 minute survey will provide you an unbiased assessment of this, as well as other drivers of business value (8 in total) that are within your control. Additionally, the less dependent your business is on you personally, the less time you will need to be involved in a post-sale relationship with the buyer.
If you don't already know the value of your business in today's market - FIND OUT!
This is non-negotiable. You can't change what you don't know. While there are a variety of ways to realizing value through selling, you first need a valuable business to sell!