Exit Strategies Can Lead to More Money in Your Pocket!
Exit Strategies Can Lead to More Money in Your Pocket!
They say that the hardest part of being a parent is letting go of your children! Having provided the nurturing, care, support, teaching, training, education love and support that is part of the role of a parent, feeling that they will never make it without your support, it is very difficult to let go!
Have you prepared yourself for the day? Does this sound familiar? Does owning a business have similar resonances? Do business owners need assistance in letting go? Do you have an exit strategy? Are you subconsciously thinking, will I ever get the money I believe my business is worth?
The answer will invariably lie in ensuring that you have prepared yourself for the day, with an active exit strategy that is structured with timelines and actions. An exit strategy to ensure you get the most money in your pocket typically starts like this;
1. Preparation
2. Valuation
You should determine the market value of your business before deciding to sell. Use business broker who is a Registered Business Valuer (RBV) to establish a market price for your business. An RBV has access to market data and has undergone rigorous training to provide a fair market value for your business.
3. Appoint an AIBB (Australian Institute of Business Brokers) accredited business broker
They will manage the sale process. A business broker will be able to advise you when your business is ready for sale and advise on the sale process.
4. Selling
Once a business broker has been appointed, an Information Memorandum or Prospectus will be developed that outlines and highlights the key features and benefits of the business. Then a detailed sales strategy will be determined that identifies the optimal channels and potential buyers for your business.
5. Due diligence
6. Employees
If key employees is critical to the sale, develop a transition plan.
7. Suppliers
If your business depends on specific supply chains or suppliers, develop a plan to transition those agency agreements. With multiple supply agreements a share sale may be the only pathway to a successful sale.
8. Negotiator
This is where a business broker becomes critical, they will negotiate the most favourable terms of the sale, how to get the top dollar for your business.
Overall, the key to getting more money in your pocket from the sale of your business is to be well prepared, to foresee any encumbrances or roadblocks and address them prior to putting your business on the market.
Tags: small business expand selling success entrepreneurs
About the author
Hugo Martin
Hugo has over 15 years’ experience as a Business Broker and he is also a Registered Business Valuer. He was awarded Queensland Business Broker ...