Here we look at the five stages to focus on and how to get your plan going.
Selling your business: How to get your plan going
Do you imagine exiting your business at some point and benefiting from the value created by your life’s work that sits within your business? The reality is that many people are asking themselves these questions, but what are they doing about it? The tragic reality is most people don’t get past the dreaming stage.
A goal is a dream with a deadline. This was the mantra I first heard at a conference that I went to in the nineties. It’s only now I know it was authored by the controversial character Napoleon Hill (USA 1883 -1970).
The thing is, Napoleon Hill had a point. You know you’ll exit your business one day; everyone does…one day. Selling a business is a complex, although not necessarily complicated, process. If you were selling your car or your home, you would at least make them presentable and show them in the best light.
So why is that so many good businesspeople fail to prepare to exit their business? It’s partly because it always feels so far away and there are a lot of immediate things screaming for attention.
Succession Plus is a selected 55/Redefined partner offering strategic advice for SME owners who want to consider or manage succession and exit planning. Whether you want to run your business on a part-time basis or plan to move away completely, you can take advantage of expert advice. Contact a Business Planner at Succession Plus today.
Another big reason is that business owners have generally not exited a business before and don’t know what needs to be done to ensure they maintain control and get the best deal. The first person to knock on the door and offer a price is unlikely to be doing you a favour.
As it happens, dreams can come true when you least expect them to and not always when you had hoped. Your business is most likely your biggest asset and may employ family and friends, so perhaps setting a goal now is the thing to do for everyone’s benefit.
I personally know of London family business that never planned on an exit of any sort. The forced end result was little better than a fire sale achieving virtually no cash. Such a shame for all involved.
At the same time, I am currently working with a company in Berkshire that is enthusiastically working up options and plans for a business exit in 2028. Their dream with a deadline is very likely to be achieved in style.
Start colouring in your dream. Write down the things you would like to achieve by exiting your business. What will the outcome be of your years of hard work? Now, when is this going to happen, what’s your deadline?
Checklist: The five stages to focus on when selling your business
If you try and sell your business in just a few months you will rarely get the best outcome. If you plan three years plus in advance you will be providing yourself with many more options and the process will be a lot more enjoyable.
Stage One: Identify Value
- Goals and Outcomes
- Fact Find
- Business Insights Report
Stage Two: Protect Value
- Financial Planning
- Unplanned Events
Stage Three: Maximise Value
- Exit Options
- Strategic Planning Business Model
- Strategic Financials
- Systems and Procedures
- Marketing and Sales
- Corporate Governance
- Ownership Mindset
- Peak Performance
- Management Succession
Stage Four: Extract Value
- Tax Planning
- Liquidity Event
Stage Five: Manage Value
- Ongoing Investment Planning
- Asset Protection
- Estate Planning
The reality is, if you have read all this article, you are already further ahead in understanding of how to sell your business than many people. Selling your business is an important life event and as such should be planned and considered. You can never start the process too early.
By Kevin Harrington, Partner, Succession Plus UK