Unless you are committed to dying with your boots on, there will come a day when you desire to exit from your business and retire or try something different.
The way that you organise your business, and in particular, the way you organise your finances, will have an impact on the value (£’s) you can expect to receive when you hand over the keys.
Who will you sell your business to?
There are a number of options. For example:
- Hand over the business to a family member.
- Sell the business to a competitor.
- Sell the business to your management team.
What factors will increase the value of your business?
A key item that a potential outside buyer will be interested is your customer list. Do you have a number of regular, high value customers, or are you reliant on one or two key customer relationships? If the latter, this will tend to devalue goodwill as the loss of one or more of these high-value customers may have a serious impact on the buyer’s ability to maintain profitability.
Another issue that would help a buyer achieve a successful transition is if you are willing to stay on, after your sale is completed, and support the transition process for a fixed period.
Building a competent team, and the systems to run your business effectively, will also add value to the selling price of your business.
Planning is critical
Business exit planning should be close behind business building activity. It can and should be planned for.
And the planning process is not a one-off affair. It is something you should review on an annual basis. In this way you can build your business with a clear end goal in view and make decisions that will not only maximise returns while you are in charge, but also increase the value of your business to an eventual buyer.
If you would like to discuss your business exit options, we can help.