The statistics on deals getting done will only be exacerbated by the number of businesses that will hit the market increases. The number of buyers will likely not increase as the number of sellers does. This makes it that much more important for you to differentiate your business from the rest. The way you do this is with planning.
You may be one of the lucky few that sells without planning. Even if you part of this small group, you likely will not get the best deal possible and will have to take on more risk in order to complete the deal.
You may feel like at this juncture in your life it is pointless to try and sell your business. Even though your business might not be a sellable asset right now, does not mean that in the next 5 years or less your business can’t be turned into a sellable business.
The first thing you need to do is decide. Decide that you want to sell your business. Decide that its time to stop putting off the future. Decide that you want a better outcome then just turning off the lights one last time and locking the door behind you.
Everyone is aware of the various stages of business. The planning, hustling and passion in the startup phase of the business; the growth and establishment stage when your business develops its processes and procedures; and the expansion stage when you streamline and grow your business are all widely discussed and covered. Amazon currently lists over 1000 books for sale covering various aspects of starting a business but less than 50 on exiting your business.
Many business owners overlook the maturity and exit stage of their business cycle. Its not that they don’t know about it or think about it. They are so focused on cash flow, opening the new location, team building or similar types of activities that they run out of time to focus on what they want after they are done running their business. The other biggest reason this stage is overlooked is because exiting your business is often view as an event and not a journey. The business owner sees the retirement day, the closing of the sale or the day their son or daughter takes over as the exit. They do not consider what it takes to get to that point and what life will be like after that point.
While it is important to focus on the day-to-day activities like landing a big, new account, developing new products and handling employee issues, there needs to be a specific vision for your business and you need to stick to a plan to create that vision. Treating your small business like a much larger business, and bringing in advisers and mentors that can help not only cultivate and stay focused on that vision you have but also help you to make that vision a reality. Big businesses rely on their executive teams to do this and while you likely cannot afford to have a full time executive team, a part-time team can be a reality.
There is nothing wrong with a business owner that wants to be aggressive. Big visions and bigger dreams have lead to many successful businesses. Often frustrated with having to deal with payroll, website design or networking events, some business owners want to focus on growing big and fast. Your motivation is getting the biggest multiple and seeing the EBITDA rise quarter after quarter.
Running your business in this manner takes a special type of counsel. You need to move fast and take on risk. Waiting around for weeks for documents or review of contracts is lost money. There is always some level of risk when you are growing fast. You counsel who can help clean things up along the way and not someone who is telling you that you can’t move forward or slowing deals down with massive redline changes.
You probably have a very clear vision of the big picture, you know where your business is at and you know where it needs to go to achieve your ultimate goal. Having professionals around that not only see your vision but make the path to make that vision a reality a priority in their service to your business can be vital. Ignoring potential issues or hoping you get lucky and nothing comes up, should not be your strategy. You need to find an experienced professional that fits what you need.
Some business owners are motivated by leaving a lasting legacy. They want to see their children take over the business some day, they want to preserve the culture and business for the sake of their employees or they want to leave a lasting impact on the community that has supported them. This vision of what you want your business to be is achievable but it does not happen by chance.
One of the big focuses for a business owner with these types of visions for their business needs to be on the next generation owner. Who is that person? What does your business need to look like to help ensure that person is successful? What skills does that person need to have to make sure the business is successful after you are not there? What steps need to be taken to get your business ready? If that person that will be taking over is internal in the business, what training and coaching do they need? If the next owner is outside the business, how do you find and attract them? These are just a few of the questions that need to be considered in order to preserve the legacy you want for your business.
It can seem overwhelming, especially with all the typical work you have, but with enough time, small steps can achieve big things. The first step is sitting down with an experienced professional and getting started.