If you’re thinking about selling your business in 2013, then you might be encouraged to hear that the sale of small businesses rose slightly in 2012, especially in the last few weeks of the year, according to a recent report released by BizBuySell. The end-of-the-year bump in sales is attributed somewhat to concerns of going over the fiscal cliff and looming questions about tax rates. The report also predicts that this trend will continue and slightly increase in 2013 over 2012.
An article in Entrepreneur Magazine, “Selling Your Business? How to Get the Most for It,” published at the end of 2012, provides some helpful tips for business owners who may be looking to sell their businesses in the near future. However, if your goal is to sell your business at any point, these are things that you should keep in mind all the time. And, these tips reveal why exit planning is critical for business owners as they think about their future end goal.
You are still the boss. Even if you’re looking to sell, you need to ensure that your business is still “efficient and competitive.” Make sure that your business is performing at its best by assessing your strategy, cash flow, expenditures, and operations to make sure that you are maximizing the value of your business.
Know your numbers backward and forward. In addition to the obvious that you should be on top of all the time, such as your financials, you need to know the value of your intangible assets, such as “employees, standards of practice, procedures, and customers.”
Go long. Regardless of when you’re thinking about selling your company, you need to document and keep your long-term goals in mind, both business and personal. Planning in advance will allow you to analyze your options, determine who the potential buyers may be, and pick the right exit strategy that will allow you to achieve your goals.
Be willing to change. When considering a potential sale, you need to be nimble. This may include identifying areas of your business that may need to be improved or altered and being willing to execute the necessary changes. It is also critical to hire strong team members who can handle the daily operation so you can work “on” instead of “in” the business.
Know what you are up against. Find out about transactions that have occurred in your industry to help gauge how your company may be valued in the market by potential buyers. It can help you in negotiations with possible buyers as well.
As a business owner, these are areas that should be addressed regularly – throughout the life of a business – not just when you’re looking to attract potential buyers. If you’re thinking about selling your business, whether it’s this year or many years down the road, keeping these points in mind and developing a sound exit plan can help you minimize the surprises and difficulties that a sales transaction can bring.
The exit planning process can provide a business owner with direction and real vision for his or her business, identify opportunities for growth, and determine areas that may need improvement. Owners should start thinking about their exit plan early in the life of a business and develop a strategy that will help them achieve their financial and personal goals…both short and long-term!