What will 2015 look like for your business?
No matter if you are planning to exit your business in 2015 or grow it to the next level, you will need the same key ingredient … A PLAN.
We all start a new year with good intentions, full of energy and enthusiasm but life catches us up and we find ourselves again working in the daily routine of our business. You will have heard the line “work ON your business not IN your business” but what does this mean to the business owner in respect of their ability to sell.
I am a business owner, and I fully understand the continual balance we undertake every day. Securing new business, dealing with existing clients, staff, marketing and growing whilst also having to perform the daily tasks of admin and management ……. Small business is not easy but it is rewarding. You will have spent many hours and considerable money on your business and will be looking to reap the rewards when the time comes to sell
So the PLAN …
Most people in my experience leave the planning and changing until the last minute when they are ready to sell and looking to do so with some speed. It is imperative that you start your business exit planning long before you need to sell, there are many factors to look at that will impact how attractive your business looks to potential buyers, many of these things are not a quick fix and must be implemented over time to get it right.
What do Buyers want?
Buyers are of course looking to mitigate their risk when buying, and achieve a good return on their investment, so the more “solid” your business is the easier it will be to sell.
Things to consider:
Lease: how “saleable” is your lease? Does it have attractive terms and options available to a purchaser? Banks that are lending on a business look for a minimum of a 5 year term so this is something you should consider when negotiating a lease “no lease no business”
Financials: Are your accounts up to date? Don’t put off getting your tax returns done, keep your accounts up to date. A purchaser will expect to have current and correct financial information readily available
Staff: Does the business rely on you? ask yourself this question “ if you were to take 6 weeks off with no phone or internet access, would the business continue at the same level as when you are present ? “ If the answer is no then YOU are the business, take you out and the business suffers. This represents a risk for the purchaser, delegate some of the work, put in account managers there needs to be a back up to you!
Presentation: You never get a second chance to make a first impression. Take a good look at your business, is it looking its best. Keep things up to date, splash out on the new carpet or fixtures. No one wants to buy a tired shabby business, and keeping it smart and clean can make a real difference when it comes to sale time
Systems and procedures: Business owners tend to overlook this point as being unnecessary, why document things when everybody knows what to do? Again it’s all very well that you know, but if you’re not there? A buyer wants reduced risk; by documenting your policies and procedures in an orderly and defined manner it gives comfort and certainty to a buyer.
It is no surprise that well-presented, well organised and profitable businesses sell, ask yourself “Would I buy my business for the price I am asking?”
If not, then it’s time to make some changes. New Year New start !
Catherine Kimpton CEA REIV , CPBB AIBB