“How to Get Your Business Ready for a Sale: Part 1—Before You Plan to Sell” is the first post of Carol’s three-part series on the Bank of America Small Business Community about how to make a graceful – and profitable – exit from your business. Carol begins:
Most business owners see the true “pay day” for their work when they sell their business. Other entrepreneurs decide to sell because of changes in circumstances. Regardless of the reason, one of your top goals is to maximize the value you receive in exchange for the years of hard work you have given your business.
Yet many entrepreneurs don’t plan for their exit, which can cause you to leave money or other assets on the table when you sell your business.
Below is the first part of this three-part series designed to help you prepare to sell your business and maximize the value you receive.
List and Prioritize Shareholder Objectives
Maximizing value in a sale is not always about getting the highest sale price – there are often other drivers of value for entrepreneurs – including a variety of non-financial priorities. These can range from ensuring that long-term employees have a job post-sale to keeping brand names intact. To maximize value, it is critical for you and your other shareholders to establish and rank your priorities. This can be a tedious task, as purely financial investors may want to maximize dollars, where entrepreneurs with more of an emotional tie to the business may prioritize non-financial aspects of a deal.
While priorities may change as the company grows and evolves, this exercise will provide a roadmap for decision making about the business – while also positioning the company for sale and assisting in assessing potential offers.
Create a Dream Team for Your Sale—and Do So Early
While some entrepreneurs try to sell their business themselves, doing so almost always is a penny-wise, pound-foolish endeavor. Strong service providers should help you prepare for the sale, as well as add substantial value during a sale process. In fact, if you pick the right providers, they should more than pay for themselves.
You can read the rest of the post here.