You’ll likely have one of two reactions to the notion of selling your business:
- “That’s why I’m going to run this business ‘til I drop dead!” OR
- “That’s why I need to help figuring how to get out.”
If you’re aligned with the former, you can stop reading now.
If you resonate with the latter (or are a little curious), read on!
[Selling your business] takes a lot of time, stress and energy…In our case it took a year. I was completely uninvolved in the business during that period of time.
-Steve Kopitz, CEO of Summit Sports
What do you mean “selling your business is like selling a house?”
You may think you are busy now; however, compare the experience of selling a home to selling your business. When you get ready to sell a home you have to
- clean it up,
- fix it up,
- find a buyer, and
- find a new place to live.
As you know, each of these steps is often more complicated than anticipated!
3 Actions Steps When Preparing to Sell Your Business
- Decide when to sell and to whom to sell. If you’re past starting a business, you’re too late. Really. Any good business transactions attorney will tell you that the corporate structure you choose has implications for how you’ll run and grow and sell your business.
- When to sell. Your next most ideal time frame is five to eight years out. As one attorney remarks, “If you’re going to sell in the next five to eight years, be ready to go when the market is ready for you.”
- Your desired role.
- If you want to take a “second bite of the apple,” remain in the business or the industry; you’ll need to pick a buyer with whom you want to partner with until the next liquidity event.
- If you want to sell, do you want to sell to a third party, family or to management? What does each of these choices mean in terms of guiding the business for the next five to eight years?
Only after you’ve decided on these issues are you then ready to fix, find, and make future plans.
…the business has to be clean, everything’s got to be in order. If there are any issues, you’ll need to disclose those up front because they’re to go through everything and find everything.
-Kopitz
You will face unavoidable roadblocks to selling your business. And every unaddressed issue will diminish the multiples you can expect to get from your firm.
Prospective Buyers Want to Know:
- Tell me about your clients, vendors, or products and degree of concentration.
- Tell me about your management team.
- Tell me about your last three years’ P&Ls and Balance Sheets.
- What are your typical weekly activities?
- When was the last time you took a vacation? How long was it?
Are you ready? American Business Advisors stands ready to help you answer that question.
TOOLKIT:
Take action today!
Click Here to Sign Up for our complimentary business assessment to help you down the right path. ABA’s Family Succession Planning service is uniquely honed to help you get your business ready when your buyer is!
Quote Source: http://www.wsj.com/article_email/the-missing-boom-in-small-business-sales-1444865868-lMyQjAxMTA1ODE1NTgxMzU4Wj?alg=y
