As always, planning is essential
Everyone dreams of exiting their business with a great sale price. Whether you’ve found the right buyer or you’re handing it over to family, you’ll want to realize a successful reward for all the years you’ve put in, growing the business. You might be thinking about a new business venture, or you just want a comfortable retirement. Whatever the reason, getting a great sale price for your business comes down to preparation and planning.
It’s important to always have your business in good shape to sell, rather than waiting until you actually want to leave. You never know when an unexpected offer might pop up, or something may happen to you to prevent you continuing. So, it’s better to start preparing to sell sooner, rather than later.
Preparing for sale – critical factors
Getting the best price for your business means having it in excellent shape to sell. It doesn’t matter if you’ve got buyers knocking or you’re dreaming of a far-off retirement; to make sure your business is in the best shape to sell at any time, make sure you:
- Ensure you understand if you are selling the assets of the company or a share purchase. The first step should always be consulting your accountant for the best tax strategy for your proceeds.
- Forecast your expected net profit over the coming year so you can determine how healthy your business is. Then you can take steps to improve it, so it becomes more attractive to potential buyers.
- Ensure all your processes are documented. Write everything down so that the new owner can run your business without you. Create manuals that outline all your operating processes.
- Increase customer loyalty – you should always be doing this anyway, but when it comes to selling you want to be able to reassure buyers that customers will stay. Focus on improving your customer experience so they keep coming back.
- When you’re actually ready to sell, talk to your suppliers – they need to be in the loop so they will continue to supply any new owner. Try to introduce the new owners to them if possible.
- Are you willing to hold the paper on the sale? This is known as a vendor take-back. This can be an attractive addition to the sale offering of your business as some purchasers will not have the resources for the down payment etc. This can be a great way to minimize taxes for you and to earn additional interest revenue .
- Again, when it actually comes to sale time, you need to put together a team of experts. Make sure you’ve got your accountant, insurance agent and lawyer fully involved in the process, because there’s always a lot to consider in terms of paperwork and legalities, and it’s not a bad idea to consult a business broker.
You should also seriously consider what you’re going to do with the funds you receive from the sale. We’ve got a range of investment solutions that will ensure the fruits of your hard-earned labour keep working for you, so talk to us about options for investing the sale proceeds.
When all is said and done, successfully exiting your business comes down to planning. The sooner you put your plans in place, the more successful it’s going to be. And at the end (unless you’re staying on in some capacity), you need to do the hardest part of all – walk away. Once the new owner has taken control, all decisions are theirs. Once you’ve let go – let go!
Help & Resources
- Contact one of our small business advisors to for advice on selling your business.