For many entrepreneurs, selling their business is one of the most important decisions they will ever make. For some, it is like giving away an only child. For others, it is a daunting process. Some of the most common self-reflecting questions include:
- Who will buy it?
- What kind of buyer will it be?
- Will they care for it like I did?
- Will they grow it?
- Will they break it up?
- What will happen to my family?
- What will happen to my staff?
- Will the new buyers be able to retain work morale?
- Is it the right time to sell?
- What will be the transition period?
- How long does it take to go through the process?
- Will they shut it down and move it?
- What can I do to maximize the value?
- What will it cost?
- What about legal liability?
These are just a few of the many questions that will arise. As you go through the final process, you will be bombarded with questions, spend months preparing documents, and in the end, the sale may fall apart. As with anything, it comes down to doing your homework, setting realistic expectations and then laying out the plan in a logical order. The old adage of hitting a well-defined target has never been so true.
A well executed exit strategy can take three to five years of preparation. Why so long? The value of a business comes from a variety of pointers that include:
- Position in the market
- Brand name awareness
- Sales & distribution channels
- Inventory flow – in and out
- Management team
- Systems and reporting
- Growth curve & future opportunity
Getting these pointers right so that a buyer will ‘want to pay a premium’ for your business takes time and a commitment on your part. You also have to consider how you will release the news to your staff and customers. Critical to the process is retaining key staff and management team. The last thing you want to have happen is see your key people leave because they are not comfortable with the transition. Exit-plan will coach you through these milestones and help you uncover the potholes in the road ahead.