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Exit Strategies For
Business Owners & Directors
As an entrepreneur, where do you want to be in five years time? Still chained to your company? On a beach? In your garden? Planning how to fit your choice of business interests into your social life?
If you are thinking about selling your company, you have some basic questions to answer:
- What is my business worth?
- What do I need when I retire, and when should that be?
- How can my business achieve this?
- How do I sell it?
- What is my succession plan?
The Need to Plan
"I want it all, I want it all, I want it now" are great lyrics for a country western song.
However, in the real world, obtaining top price "now" for a business is only obtained with proper timing, preparation and planning.
Questions which must have clear answers are:
· What is happening in your market right now
· What is likely to happen over the next year or two
· Political/government/legislation factors/taxation
· Technology developments and competition.
Get a professional valuation of the company. Spend time on grooming the business for sale by dealing with:
· overdue debtors
· unnecessary expense
· organization/staffing issues
· cash flow
· lining up activities with a wider strategy
In theory these activities are what you do all the time, but they acquire a new urgency at this critical time.
Keeping it Confidential
You need to be certain that your business will be marketed without current employees, customers or competitors being aware that the business is for sale. All meetings regarding the sale of the business should remain confidential.
As a seller, you will be discussing the sale of your business with a host of people; accountants, bankers, lawyers, family members and various other business associates, so at some point the cat may be let out of the bag, so expect it will occur. When and if it does, you MUST decide in advance how you are going to handle inquiries and questions if you intend to field them yourself.
A response might be: "we are always interested in listening to offers from serious buyers", which leaves the door open to pursue discussions and continue to manage the communication process.
Business As Usual
You have to manage the sale project which is perhaps a once in a lifetime activity for you as well as managing your business. At this point, you could be forgiven for having a slight feeling of nausea.
Large corporations use their advisers, major accounting firm, stockbroker, and lawyers to manage the sale. However, while most, not all of the major headaches are removed, major fees are paid in return for these professional services.
Alternatively, there are Business Brokers who provide confidential full service, providing valuation advice, grooming, buyer identification and vetting, including information release. A Business Broker will handle the full project management service to the point of having a sale agreement. This lets you carry on managing the business, which is what you do best, while your Business Broker undertakes the planned sale, which is what they do best.
For more information on how to sell a business, contact Jeff Slaton |
