When is the Right Time to Sell?
How often do you exit a business? Most owners only exit a business once in their life. It is a new experience with a series of decisions that can alter the outcome.
Time is a valuable tool in exit planning. In general, the shorter the planning timeframe is, the less profitable the sale may become. Time enables you to refine operations to maximize value; ensures key-men and non-competes are in place and allows owners to remove themselves from the day-to-day operations. Our transition blueprint outlines the process to begin an exit strategy.
What Do Buyers Want?
They want profits or a strategic advantage. They invest to:
- Make money
- Expand into a territory
- Add a product or service line
- Acquire your customers
- Cross-sell other services or products
- Execute a consolidation strategy
Owners need to show high value through financial statements and tax returns that reflect high profits. There may be a need to eliminate or refine:
- Ghost family payrollers, excessive rent paid to themselves, vehicles, non-essential travel, etc.
- Management might need training, employees may need non-competes, relationships need to be transferred and owners need to be emotionally prepared to leave.
Are You a Baby Boomer?
If so, it is time to talk. We think there will be a wave of businesses looking to exit in the upcoming years. If your company is one of them, we should be working with you to help establish a plan, so you can create a successful transition, whether that be a sale or a succession. Contact us today.