Is Your Business Ready to be Sold? / by Kerri
It’s not the same thing. How many of these 8 questions can you check off as done – to make your business ready to be sold?
- ___ Do you have a history of consistent sales and profit growth?
Documented history of sales, profits and growth which you can show buyers provides proof that can be used at valuation
- ___ Do you have at least 2 years of clean financials?
Your bookkeeper and accountant don’t see the whole picture. You have other assets and contracts. All of these will be reviewed and valued. You can’t hide anything from buyers or brokers.
- ___ Do you have a foundation of robust systems, processes and structure and are they fully documented?
Does your business run on consistent processes and procedures or do you run it out of your head? To be ready to be sold, all systems, structure and strategies must be documented.
- ___ Do you have projections showing increasing value for the buyer long after you exit?
Buyers don’t want to buy an old tired business on its last legs. They want to know there’s more life, more opportunity for them to make a good profit for years after your exit. Can you prove that opportunity?
- ___ Are you ready to make the necessary changes to make the business buyer attractive?
How much time, effort, and expertise will you invest back into the business now, as you get ready to move on? Are you willing to set the business up for even greater success without you at the helm?
- ___ Do you know what makes your business buyer attractive?
You must know what it is about your business that makes it valuable enough for someone else to buy it. This is the biggest sale of your life – selling the business you built.
- ___ Do you know what makes your business successful in your market?
Be sure the value is in the business and not just in you the owner.
- ___ Are all your stakeholders prepared for the transaction?
Just because you are prepared for the exit transaction on your terms and you’ve planning your transition to reinvention, – doesn’t mean all your stakeholders are on the same page with you. Before you get to the transaction, be sure all business stakeholders support the transaction so you indeed can make a successful exit from the business.
Many CEOs prepare themselves for their exit and forget to prepare the business. That can make for a very tough transition for the business, clients, team, and suppliers. All of these challenges are totally avoidable if you prepare the business for the exit transaction while you prepare yourself for your exit transition.