Whether you are considering selling your business now or sometime in the future, the most important thing you can do to ensure a successful and profitable sale is to take steps to properly position your business for the sale. There are hundreds of reasons why a company is difficult or even impossible to sell, most of which can be attributed to a total lack of planning.
Selling a business is, in many ways, like selling a house. The better and more sellable you make it look, the faster it sells and at a more favorable price. Everyone thinks about selling at some point and reaping the rewards of their time and investment. Some people want to retire at a certain age, while others choose to diversify their investments for other financial planning purposes, while still others may just be tired of the business. Whatever the reason or timing, try to start preparing your business well in advance before your desired time of sale.
This process of preparing a business for sale is the “pre-sale positioning” because that is exactly what you are doing, positioning the company, its personnel, you and your family for the eventual sale.
All too often, owners want to sell their business “yesterday,” yet they have done nothing to position themselves or the company for the sale. Just recently, a company failed to sell because the lease had less than one year to go and the building’s owner would not renew or enter into another lease because he had other plans in mind. The prospective buyer would have incurred several hundred thousand rands to move the operation, which made the sale unattractive to him.
There was also an owner who made every decision himself and did not want to remain with the company even one day after the sale. A new owner would be lost for months without assistance from a key employee or secondary manager.
How sellable is your business? Start planning your exit strategy today.
Tell us what is your exit strategy? How long in advance did you plan your exit?