Since I started my business back in 2012, I have noticed a reoccurring theme. And quite frankly, it is a little perplexing.
People start businesses for many different reasons. However, the one common theme is that business owners typically want to make money and sell their business someday. I understand this is not the case for everyone, but for many it is. What I don’t understand is how many of these business owners have absolutely zero plan for selling their business someday. Owning a business can be your most valuable asset. However, if you don’t build the asset properly, it may only be valuable to you. And therein lies the problem.
If you are just starting a business or have been in business for 30 years, the time to start thinking about an exit strategy is right now. Do I mean you need to start searching for buyers and enlist a broker? No. But you do need to start thinking about that day and reverse engineer your entire business to maximize the value.
The earlier you start thinking about the process, the more time you have to build a more “sellable” business. Trust me, I understand that as a 30 year old entrepreneur, your exit strategy is not very high on your list of things to think about. But you do need to consider how certain decisions will affect the value of your business when you go to sell. Once you get to a point where you do want to sell, there is no time left to make changes. Whatever the market perceives is the value of your business at that time, that is how much money you are going to get. Doesn’t it make sense to plan ahead and maximize that value?
Let me lay out a few example questions you should be thinking about related to selling your business…
- Could I train someone to take my place or is the entire business tied to me being present?
- Is my accounting system setup properly so that a potential buyer will have confidence when looking at my numbers?
- How are other companies in my industry valued and what steps can I take to maximize my value?
These are just a few basic questions but hopefully it gets you thinking a little bit. Selling your business can be extremely rewarding, especially if you get the value you think you deserve. Why not take some small steps along the way instead of panicking when it is finally time to sell?