Many business owners have plans to one day sell their business and ‘sail off in to the sunset’ as they say. However, many of these business owners plans for selling the business don’t go any further than this…
Here is the thing – having a ‘business’ and having a ‘saleable business’ are two very different things. For your business to be a ‘saleable business’ it must be able to run independently of you. Very few small business owners can put their hand on their heart and say this is the case in their business.
Like everything, making your business a ‘saleable business’ takes planning and time. There are no short-cuts. If you want to sell your business one day, you should be planning and preparing for it now – whether ‘one day’ is one year or ten years away.
In most cases, it takes at least three to five years to optimise your business for sale and get it to a point where it can run independent of you.
Getting it there requires you to be crystal clear on three key things:
- Who you will sell your business to
Will it be an outside entity? An investor? A competitor? Or a key person or people in the business? - The legacy you want to leave in the business
Do you literally plan to ‘sail off into the sunset’ and never give the business a second thought. Or does its existence mean more to you? Is there a vision, a purpose or values that you want to be maintained long after you depart? - The people that will lead the business
When the day comes for you to ‘hang up your hat’ who will lead the business? Do you have those people in the business now? Or do you need to recruit those people? Keep in mind, being a great technician does not mean someone will be a great leader. Developing people for leadership takes time.
When, and only when, you are clear on these three points, can you begin the process of creating a ‘saleable business’ that is a good, worthwhile investment for a potential purchaser.
At that point, the focus can shift to optimising each of the core elements of your business. Any investor or purchaser will want to be satisfied that your business has:
- The ability to run independently of you.
- The right people in the right roles.
- Effective marketing and business development processes in place.
- Reliable and thorough systems and processes that ensure smooth operation.
- Robust financial management systems, financial reserves and cashflow.
The best time to start is now. The sooner your business becomes a ‘saleable business’ the better – you will have greater freedom and flexibility, the business will probably be more profitable and more valuable, when the time is right.
Succession planning is one of our sweet spots. We love working with business owners to help them make their business more saleable and more rewarding – personally, professionally and financially.
If selling your business at some stage in the future is on your agenda, the Maestros are here to make it happen.