The 12 Secrets of Selling Your Business (1 & 2 of 12)
Are You Ready to Sell Your Business?
The decision to sell your business is not one to be taken lightly. Letting go of the enterprise that you’ve built involves careful planning and serious consideration of the financial, legal, tax, lifestyle and emotional matters you’ll be facing.
Planning and Preparation are Critical!
Because there are literally hundreds of considerations that will affect the value or your business, your after tax proceeds, and the attractiveness of your business in the marketplace, proper planning and preparation can make a huge difference in the outcome of the sales process. We encourage all entrepreneurs to control the circumstances that affect the value of their businesses and to constantly build for maximum return on investment. Every step you take to prepare your business for sale will ultimately create a more enjoyable and more productive business environment for you to work in. It will also ensure that you’re ready when the right opportunity comes along.
A Word of Caution
Research indicates that in the next 5 to 10 years, Baby Boom and Generation X entrepreneurs will be retiring in record numbers. It is anticipated that 70% of privately held businesses will change ownership during this time. Never in history has a change in small business ownership of this magnitude occurred. That means that if you’re a Baby Boom, Generation X or Millennial entrepreneur, you might be selling into the most competitive marketplace that has ever existed. A competitive market means it’s likely that only the most attractive and well-prepared businesses will sell for top dollar.
Please join me on a 6-part series on The 12 Secrets of Selling Your Business and Getting What It’s Really Worth! Here is Number One and Two.
Number One - Determine Your Goals in Selling Your Business
? Define and thoroughly evaluate your reasons for selling your business
? Consider what alternatives there might be to selling
? Determine if selling is indeed your best option at this point in time
? Determine if the proceeds of sale will provide the funds you require
? Work with an experienced financial planner to determine your best approach to managing the potential proceeds of sale. (Ask your intermediary for recommendations)
? Work with an experienced tax lawyer to determine how to maximize the proceeds of sale and how to structure your corporate and transactional considerations. (Ask your intermediary for recommendations)
? Evaluate your optimal terms and conditions for sale
? Determine the best possible timing for you
- Are you ready for your retirement?
- What will you do once you sell your business?
- How does your family feel about selling?
- Are you interested in a new venture?
- Will selling satisfy your financial needs for retirement or other pursuits?
- Are you interested in continuing to work in the business?
- Do you plan to buy another business?
Number Two - Understand the Factors Affecting Value
? Get a professional appraisal done by qualified experts with a track record you can trust
? Understand the value drivers that will affect the sale price of your business
? Consider your potential for increasing value if you make strategic improvements
? Decide if the time, effort, costs and resources are realistic to increase the value of your enterprise within a reasonable time frame
- What kind of growth is your business experiencing?
- Is your business operating at optimal efficiency?
- Is your return on investment approaching or at a peak?
- Have you implemented systems and processes to make it possible for a new owner to successfully operate your business?
- Is the business dependent upon you?
- Can your knowledge and skills be transfer to a new owner to increase saleable value?