You’ve Worked Hard and Built Your Business

So Now What?

You’ve spent considerable time, perhaps decades, realizing your vision of the business you created. And now you’re at the enviable, yet frightening, crossroads of what to do next. Do you continue to grow your enterprise, pass it on to your offspring or prep it for sale?

By the way, it’s absolutely typical for business owners like you to have “next step” concerns. Most likely you can relate to some or all of the questions we hear voiced over and over by entrepreneurs who have reached the point of considering how to proceed when it appears time to close the last chapter of being actively engaged in their businesses.

• Am I ready to sell … financially and emotionally?
• How much is my business worth?
• Who do I turn to for guidance?

Financial and Emotional Readiness

Now these are two powerful issues to wrestle with!

On the financial side, have you thought through what sales price will satisfy your financial needs? Keep in mind that the value of your company is what a qualified buyer is willing to pay, not what you would like to walk away with from the closing table.

There are solid financial numbers that will help determine the asset value of your company. Equally important is the human element … meaning are you essential to the continued success of the enterprise? More on both of these issues in a bit.

Emotional readiness is something that only you will be able to judge. Yes, it will take significant soul searching, ideally by engaging the help of an objective third-party with proven success in helping business owners face up to this critical question. Sometimes letting-go of an effort that has been all-consuming may be borderline traumatic. That means knowing specifically your plan for “life after entrepreneurship”.

How Much is My Business Worth?

There are objective and subjective components to the answer to that question. Objectively, assuming your books and records are up to date, a full-service business advisory/broker resource will give you an accurate and affordable financial assessment of the value of your company.

Subjective appraisal elements are more complex as there are judgment calls that need to be made as well as “clean-up, paint-up, fix-up” issues to be dealt with. Let’s focus on this piece of the valuation puzzle.

The number one subjective issue is whether your company is a viable, profitable entity without you, the current owner, on board. Said another way, the more indispensable you are to the company’s success translates to less perceived value by potential buyers. Position your company as not being dependent on your continued presence.

That means demonstrate a competent staff and management structure that functions well in your absence. Books and records, written policies and procedures should be in place – legal, regulatory compliant and up-to-date. Proven systems maximize the efficiency and effectiveness of the company and directly are reflected in the sales price.

Just a word about the optics in positioning your company’s worth. Your company must project its image as a marketable package. Scrutinize what your business looks like inside and out … to a prospective buyer. Curb appeal matters!

Finally, there is one last question when it comes to how much your business is worth. When … today or at a future date? Many times following a thorough analysis of the considerations presented in this article, the right call is to decide on a realistic target date to “get your house in order” and seek to enjoy peak sale value.

Who Do I Turn To For Guidance?

In evaluating resources for help in navigating the shoals of business transition, certainly your trusted advisors … accountant, attorney, financial counselors … must be part of your planning team. The next question is how to “keep all those aircraft flying in formation”.

Of course, it will require a central coordinating entity. That function is not likely to be fulfilled by you. You already have a full-time job running the very business you seek to sell and lack the experience. That points to the need for expert advice and execution by a proven resource that delivers both advisory and business brokerage services.

A competent business advisory/broker resource will help you sell your business today if that is your goal. Alternatively, a full-service resource will work with you to groom your business for future maximum curb appeal and peak sales value. Additionally, a proven resource will not offer a one-size-fits-all formulaic approach … your company is unique and advisory services must be tailored accordingly.

OK.  Let’s look at the process of selling your business and the 4-step fulfillment a proven advisory and business broker resource will deliver.

Preparation:

• Choose and monitor a proven expert valuation firm.
• Profile your company’s processes, pricing and customers.
• Target those elements that need attention to enhance the intrinsic value of the company.
• Determine best transition strategy – family/employees/outside buyers.
• Initiate plans for the company to be in peak condition both operationally and profitably.
• Create a listing agreement which describes the company – anonymously, of course.
• Partner with key trusted business advisors as necessary to best serve your needs.

Promotion:

• List the company for sale through a wide-spread local network and national contacts.
• Promote the value proposition of your business to sales network resources.
• Be the initial point of contact for inquiries and screen prospect introductions.

Participation:

• Qualify buyer prospects to interview
• Help to determine best potential buyers
• Coordinate due diligence of qualified buyers
• Manage negotiations
• Assist with closing the sale

Post-sale:

Post-sale advice, guidance and exit-strategy counseling.

Takeaways

Seek a competent, capable business advisory/brokerage ally. It will save you considerable time and likely enhance your take-home from the closing table. Expect the following plusses.

• Where your company is today
• What value may be added to enhance your sales price
• What time-frame is realistic to take the necessary steps to maximize your return
• How to make the best use of your time and money in the process

 

Minimize your time commitment by outsourcing the details. That means you concentrate on continued business success and enjoy a stress-free transition process.

 

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