These days, selling a business requires as much planning as starting it. After all, you spend a great deal of your precious money and time on setting up a business; and obviously, you would not like to sell it for a loss. Not surprisingly, experts say it takes a business owner a minimum of 5 years time to implement a successful exit plan strategy.
There could be various reasons for selling a business. You could be compelled to sell a business because of bankruptcy or some emergency or natural disaster that may have disabled the business to operate. Or you might be thinking of selling a business to go into retirement. Or better still, the plan might be to start a new business by selling the present one.
Usually, businesses do have some logical successors, especially the family owned businesses. But typically, the small and medium sized entrepreneurial startups do not have the luxury of logical successors. Hence, such entrepreneurs or small business owners are left with no option other than selling the business.
Whatever the reason, you need to chalk out an effective exit plan that yields profits for you. Here are a few things which you need to consider when you plan to sell your business:
Keep everything up-to-date
Selling a business is like selling a house. When a house is up for a sale, don't you clean it up, give it a fresh coat of paint and make it presentable? Similarly when you plan to sell a business, keep everything organized and ready, right from the infrastructure to the financial records. Even if you are no more interested in running the business, you would still have to keep the financial or business records updated, keep the premises spic and span and the inventory full; in order to draw potential customers.
Check your facts about what you seek to sell
Selling a business doesn't only mean physical assets. It includes trademarks, goodwill, clients list and so on. You have to determine whether you want to sell everything in the corporation or not.
Greater revenues
Place yourself in a buyer's position and ask yourself this question: 'Will you buy a business that doesn't guarantee great revenues”. The answer will of course be NO. Can you then expect to attract good buyers if your business is not bringing in large revenues?
The key to getting good buyers and an expected price lies in maximizing your operating profits in the run up to the sale of the business. If you require proper guidance on how to maximize revenues, you can join a CEO peer group in Atlanta or any other city in which you operate. CEO peer groups are one of the best ways of getting practical guidance, especially if you are yourself a CEO, President or General Manager who does not get the right kind of support or honest opinions in his/her own organization.
Minimize risks
If you are confused about what you can do in your business to draw potential buyers; start thinking from a buyers' point of view. No buyer will buy a business which involves big risks. Identify what needs to be done within your organization in order to minimize risks. Besides reduce your liabilities as much as possible and settle lawsuits if you have any.
Chalking out an exit planning strategy is not as easy as it appears to be. Therefore it is always a good idea to become part of a CEO peer group which can assist you in effectively carrying out an exit plan. CEO groups in Atlanta or any other city consist of CEOs, COOs and other top level executives who meet once a month to share their problems, business ideas and exit planning strategies. They counsel each other and give each other honest, no-frills-attached opinions and suggestions. Here you can expect to get practical ideas about how to conduct an exit plan.
Most of the time CEOs are so busy in managing their own businesses that they don't get time to plan exit strategies. That is why it is all the more necessary to join a CEO peer group and take help from people who have years of experience behind them and can offer you practical advice and not just bookish knowledge.
Tom Bordon is a freelance writer who has extensively written about CEO peer groups in Atlanta and executive business coaching. His articles focus on guiding CEOs, COOs and top level executives in making new business plans, selling a business and making exit planning strategies.