The key element in selling your business for maximum value is ensuring you own a business and not just a job.
The biggest deal breaker when you want to sell your business is how involved/important the owner is to the successful operation and profitability of that business. If the owner is key, the business will be tougher to sell. If the owner is key and the skill set is very unique or rare, the business may never sell.
So what can you do to maximize the sellability of your business and hence its value? Start with these key items:
- Take a holiday! Plan what you need to do to keep your business running while you are gone. Whatever you need to do to take a 3-week holiday will give you insight into what needs to be done to take a “permanent holiday.”
- Set up systems to run your business. Document all processes.
- Tidy up ownership. If your share structure is a mess, tidy it up. If you have minority shareholders, get them on board or buy them out.
- Document legal matters. If you have a “handshake” agreement with any of your suppliers/landlord/customers, try to get something in writing.
- Stop cheating the tax-man! Every dollar you save in taxes will cost you $25-30 in sale price (based on a 10% tax rate and a 2.5-3x multiplier).
- Give us a call. We can help you prepare your business for sale even if the sale isn’t going to occur for 5 years. Call us now at 204-478-7266×110 to see how we can help you maximize your business value both now and when you eventually sell.
If you are interested in discussing succession planning for your business, contact us at 204-478-7266×110.