Prepare an Exit Strategy. Your business’s exit strategy is extremely important. Developing an exit strategy will help direct your current operating strategies so that if an exit was to occur, it will only occur on your terms.
Every business owner will exit their business at some point. Often the exit time frame is accelerated due to unforeseen circumstances. Personal circumstances can force this to happen. Illness or death of the owner or a family member is a common cause. Divorce is another common personal issue that can force a sale of the business. If the business has multiple owners, an event for one can trigger the sale of the business.
Most owners believe their business is worth far more than anyone would be willing to pay for it. It is similar to selling a car or a house. The owner looks at the business through rose colored glasses and doesn’t see the flaws that a buyer will see.
The best way to insure the highest value at the time of sale is to have a well-run business with a track record of sales growth and profit. Good financial records will give a buyer confidence that the business performs the way the owner claims.
Documented systems is another key in giving a buyer confidence that the business will continue to operate, even without the owner. Lastly, there needs to be some key people in the business who have the ability to carry it forward. Businesses that rely solely on the owner for know-how and customer relationships are the hardest to sell.