16Jun
1. Be clear on the outcome you are after
- What value are you after for your business?
- Do you want a WIWO deal?
- Are you prepared to stay on and work for the new owners?
- Are you prepared to guarantee revenue or profits over 1-3 years?
- Will you accept shares as payment?
- Are you prepared to offer vendor finance?
These are common questions you need to be clear on as they will influence the ultimate value and timing of your exit.
2. Focus on maximising value
- How much capex is required over the next 12 months to achieve the profits you are forecasting for the business?
- Are profit forecasts sustainable?
- Will key staff leave? Are they locked in by an ESS?
- Are you, the owner, the one that owns the customer relationships?
- Are key staff due for a pay increase?
- Is your online presence professional?
- Does the business require a Brand makeover?
To maximise your business value your exit strategy must address these and many other areas that will impact the price the buyer will pay.
3. Leave enough time to execute the plan
Once you identify what needs to be done, you need to be realistic on the timeline to implement these measures before you can put your business on the market. A sale process to a listed company can take 12 months. Allowing for an exit plan, it is prudent to think 1-3 years ahead.
4. Be flexible
The process of exiting a business cannot be rushed. This is likely to be the biggest cheque you have ever banked, and you only have one crack at it.
It’s like selling a house, once you have had it on the market and it does not sell, you have to remove it and look again at least 12 months down the track! Allow time and always allow for things to not proceed exactly according to plan, there are many variables in this process, and you will need to be both agile and flexible.
Selling your largest asset is a big thing. Please do it the right way and ensure you get the best possible return on your many years of sacrifice and hard work.
To your success...
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PS If you would like to find out if your business is ready for sale, then take the quiz below.
- A score close to 100 indicates your business is ready for sale.
- A score lower than that means you will not maximise your asking price and will be “leaving money on the table”.
- A score below 50 means you have plenty of work to do before putting your business on the market.
To get started, simply rate your business! Our easy 10 question survey will tell you exactly where you are in the selling process and what you need to work on prior to selling.
Simply rank each question from 1 to 10 where 1 is where you have not started and 10 is where you are confident you have this covered.
- All key customer relationships are owned by senior employee’s, and you do not contribute to sales.
- All sales contracts can be legally assigned to new owners.
- Your Brand and website are superior to your top 3 competitors
- All staff have had salary reviews in the past 6 months and this is all documented.
- All your key employees are locked in and will remain with the business after the sale. They have letters of employment and signed confidentiality agreements.
- You have a detailed asset register with values attached
- You have a 36-month historical revenue and GP report showing results by product/service and financial forecasts for at least the next 12 months
- You are clear on the difference between selling assets and selling the company and the tax impacts of both.
- Your financials can withstand an audit by a top 5 Accounting Firm
- Your business has produced positive year on year ebitda that has grown at least 20% p.a. for the past 3 years.
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