The process of exiting from a business that you have built and managed can be a complex and emotional one. To ensure a successful transition, it’s important to plan ahead and consider the key factors involved. Here are five top tips to help you prepare:
Identify Potential Buyers: Don’t assume that the only buyer for your business is someone like yourself. Potential buyers could include trade buyers, financial investors, or even employees. Consider all options and their suitability for your specific business.
Assess Your Personal Importance: The value of many owner-managed businesses is closely tied to the owner’s personal input. To smooth the exit process, consider reducing the business’s dependence on you by training someone to take over your role and be prepared for a buyer wishing you to continue for a transitional period.
Assess Your Business with an Open Mind: Buyers will thoroughly analyse the potential target and identify risks. Prepare by performing a self-assessment and addressing common issues, such as customer and supplier contracts, financial records, taxes, and payroll.
Recognise the Emotional Aspects: Exiting a business can be an emotional process for many sellers. Plan and prepare well for the sale to help ease the transition.
Be Prepared for Additional Work: The sale process will require considerable time and effort from you. Although planning and good advice can reduce the load, no one knows your business as well as you do. Be prepared for the additional work involved.
By following these tips, you can increase your chances of a successful exit from an owner-managed business.