Now, you have grown your business over many years. You've put your blood, sweat and tears into the business to make it what it is today. You don't have anyone that you can transition the business to, and you know that the investment, both personally and financially, to take the business where it needs to go, is more than you want to take on. So you're ready to sell?
Have you grown your business both top and bottom lines to warrant the price you want? Do you have a strong balance sheet that won't eat up your sales price by having to pay off significant debt? If the answer to either of these questions is "No," you have some work to do.
Many owners, understandably, not only think their business is worth more than what it is, but also don't fully understand what it takes to get their business ready to sell and obtain the price they are looking to achieve. In fact, it's your business and you've put everything into it, so why don't others value the business the same as you do?
What are buyers willing to pay for your business and what are they looking for in terms of a strong business opportunity? Now, I'm not talking about a competitor taking you out and shutting the doors, but an individual, group of individuals, or a strategic buyer that is looking to build on what you have created.
So ask yourself these questions? If I were on the other side of this transaction what would I pay for? Would you pay for flat or declining revenue and profitability? Would you pay for a highly leveraged business that needs significant investment? Can the purchase be paid off in a reasonable time frame? What am I buying? Expertise? Customers? Geographic Territory? The same things you would be looking for in an acquisition, is what a buyer is looking for from you.
So what do you need to be doing? First, begin preparing your business for sale at least 2-3 years before you're ready to exit. That means focus! I always tell our clients that the effort it takes to grow a profitable business is equal or greater to the effort required to turn around a business.
Set a target price that you want to obtain (be realistic based on your business/market) and then put together your strategic action plan to achieve it. Focus and execution will get you where you want to go. Many times, getting outside assistance to evaluate your current business value and to create and implement your strategy to achieve your goals, can more than pay for itself when it comes time to sell. Plan, Execute, Achieve!