There is a lot of effort that goes into starting a new business, along with a strategic mindset to make it successful. When you decide it is time to sell, you want to make sure your business has as much inherent value as possible to ensure you get a good price.

Business owners are no strangers to weighing risk and navigating uncertainty, this has increased over the past couple of years. Many business owners had the uncomfortable position of having to review their carefully thought-out-out succession plans and exit strategies and to consider selling their business before they were ready and possibly, for less than the business is worth.

 

Is transition a better option for you?

To be able to get the best possible return the business owner would need to consider the following ways they would be able to sell their business;

There are five different ways to sell:

  1. Close the business down and sell the assets
  2. Sell to a family member
  3. Sell to an employee
  4. Sell to an outside party
  5. Gradual buy-out

 Adding value to your business

Whether your goal is an acquisition by a larger company, or selling your shares to a chosen successor, it is critical to make sure you are adding value to your business.

The more attractive your business looks in the market, the better price you will receive, or better yield you will see when you sell your company shares.

Ways to add value to your business;

  • Work on the business, not in it – you are no longer a fundamental part of the day-to-day operations, this allows you to focus on the higher-level strategic elements.
  • Invest in adding value – keep profits in the business, reduce your personal drawings and plough that money back into growth and investment.
  • Improve your financial health – by taking control of your finances and building a strong balance sheet, positive cashflow and attractive profit forecasts.
  • Have a proper exit strategy – with a plan that has agreed targets, you will be able to track and measure whether goals are hit, and a strategy your team can get behind.

Don’t put off your succession plan – even if you are not ready to sell

It is a good idea to think about this long before you are ready to sell, this will allow you to maximise the value of the business and achieve a better outcome. It is worth remembering that retirement does not need to be doing nothing. If your business can run as an asset without your involvement, you do not need to sell it completely.

Talk to us today about exiting your business and your succession plan

If you are looking to sell, you will need a plan. Come and talk to us about creating a workable exit or succession plan, with a clear focus on driving value and delivering a solid return on your investment.