Had Enough Fun? Getting Ready to Sell Your Business

Remember when you started your business? Perhaps you already had an exit plan in mind, but if you are like many business owners we know, there have been some deviations and pivots along the way that made you realize it was never going to be cut and dry from the start. But now you are where you are – somewhere in the middle – and the thought of planning an exit isn’t so far-fetched. In fact, you might be able to see the goal line from here. Now is a good time to chart your path.

Selling your business is a big deal. There can be significant sums of money involved, some complicated tax and financial issues and, as we’ve learned from some of our M&A colleagues in the business of advising sellers, there are significant lifestyle and maybe even psychological changes in store for the seller – some that most people never even consider.

Get Started Now

You’ve heard this advice before, wherever you are in your business ownership journey, the time to start getting your business in better shape is now. Particularly if it is a lifestyle business, where the goal is really to afford the owner(s) a better lifestyle, it is time to squarely face the facts regarding the operating inefficiencies in your organization. It will be easier to sell a tightly run ship, and the buyers will find it more valuable as well since the financials will be better and clearer. The plus is that ensuring your operations are as lean as possible should also make it more profitable in the remaining years you still own the company or firm. What’s the magic number on when you need to start? We think a good rule is to start the serious planning at least five years before you expect to sell.

There could be a temptation to tie a decision on when to sell with a decision on making the changes necessary to maximize value when you sell. Uncouple those thoughts. Tighten up the business. You may find those changes impact your timing.

Where Do You Start?

We’re marketers, and that is what we are going to discuss in this article. But the correct answer to the ‘where do you start’ question is with a professional. Many business owners probably start with their accountant, as they will want to maximize the value of what they have to sell. That’s not a bad place to start, but we also recommend an M&A advisor at some point, too.? They will liaise with your professional team while applying their expertise to the process of understanding your goals, finding the right buyer, advise you on keeping key employees, and crafting the best deal as possible for you.

But Where Do You “Start Start”?

You may not be ready to give your cousin the bad news that their job won’ t be around forever, nor may you be ready to cut back on some of the dues, subscriptions, and memberships. Your accountant can certainly help you get your fundamentals and ratios in line. But we believe the best place to “start start” is by refining your marketing strategy and building up the revenue side of your business.

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Rising Tides Lift All Boats, But Breaking Loose of the Mooring is Bad

You’ll have a tough time finding a business owner that believes more sales and higher revenue could be a bad thing, but if it exposes operational weaknesses and causes some of those key employees to leave in frustration, then it will have backfired.

That’s why we recommend first taking a good look at the market, your brand, and your marketing and sales strategy. You want to right the ship and grow – but you want to do it smartly. Plus, you don’t really know what a potential buyer will be looking for when the time comes. It might be purely financial, but there could be other reasons as well. (Another place where insights from an M&A advisor can be helpful).

We’ve Always Done It This Way

If there is one phrase that isn’t going to be a plus when it comes time to sell, it’s this one. Your buyer will likely be younger, aggressive, and with distinct ideas on how to run the business. If your business appears mired in a business model that was established in the last century, it is reasonable to expect diminished interest from buyers overall and a diminished bargaining position for you.

Get Modern in the Market

Expect to invest in some more talent to run the business. Expect to invest in the latest systems, like CRM and Marketing Automation on the revenue side and ERP on the operational side (if you have that kind of business). Now is the time to pursue product or service extensions or geographic expansions. Expect to market your business to build and maintain brand awareness. The reputation and positioning of the business in the minds of your prospects, customers, and potential buyers is something that needs to be created, deployed, and nurtured – which is always important and a never-ending part of running a successful business, not just when you are looking to sell.

Try to Keep it Fun

As we mentioned earlier, selling your business is a big deal – perhaps the biggest deal of your business life – and certainly one that will have an enormous impact on your life and lifestyle going post-sale. If you are scrambling at the last minute to try and hit a number or, even worse, discovering that the number you had in mind won’t be the number it’s not going to be fun. Many business owners look at the balance sheet and think that will be what a buyer will pay, only to be disappointed when it turns out to be an asset buy or a straight AUM multiple. However, if you have done the preliminary work, deployed and tested some marketing ideas, updated and modernized your business practices, and given it time to prove itself, you may find not only a wider range of potential buyers, and buyers offering higher numbers, but perhaps buyers interested in reasons you hadn’t thought of.

Some folks like roller coasters. Some like the merry-go-round. Some don’t like rides at all. But owning a business is metaphorically like a visit to an amusement park. If you plan ahead and do it on your schedule and your terms, you’ll have a better time. Maybe even fun.

Ready to get the next phase of your marketing underway?? Contact JQLaCorte. We have the marketing, sales, and marketing operations experience to help you modernize and maximize the revenue potential in your business.

Contact Info:

Email - [email protected]

Website - www.jqlacorte.com

Phone - 203-571-8067