Tuesday, 17 January 2012
Selling the business you worked long and hard at building is no easy decision.
Many business owners seem unable to let go of their company and wait too long. Some lose their entrepreneurial drive and the business starts sliding. Or the market starts to change and the company loses value. To get the maximum price, owners need to do some serious planning to prepare selling the business at its peak.
Planning for what is typically the biggest financial event of your life is worth your time and effort. It should not wait till the day you hand-over the keys.
Why is planning so important? It illustrates who you are and where you want to be, it will help you prioritize, it guides you along the way, and it keeps you focused. Most importantly, it can help protect and perhaps build value in your business.
In the early stages of your plan you should document your goals. More than just daydreaming about the day of retirement, actually write down what your income needs will be. Start to quantify what you need from the sale of your business and establish your optimal age to execute your plan. Know Your Finish Line!
Your goals should include more than just numbers. What are your personal goals? Is the business’ legacy important to you? What about your kids, how would they be impacted by your transition? Decide what is optimal and work from there.
Once you have decided where you want to be, start working on step two, diagnose your business. We’ll talk about this step in more detail in future blogs.
Along the way secure the services of a good business broker/exit planner to help you navigate through your exit plan. Sound guidance when it comes to goal setting, strategic planning, and the step-by-step execution of your plan can go a long way to maximize your financial payout and achieving the goals you originally documented.
Do you have small business questions you would like answered about this article or others? Please visit www.VRWindsor.com or call 519-903-7807.
William Sivell is a sales representative of VR Windsor Inc., Business Brokerage; his blog appears every Tuesday.