Readying your business for sale: Preparation and professionalization
With a significant portion of the population approaching retirement age, the number of owners contemplating the sale of their business is greater than ever. However, the process of selling your business is considerably more complex than one might think. There is a great deal of preparation involved to ensure the value of your business is maximized, and a significant amount of preparation to ensure the transition is as seamless as possible.
Professionalization is a process that a business owner should undertake to ensure that the organization can maintain profitable operations without his or her direct involvement. It involves formalizing business processes and reviewing the organizational structure to ensure there is sufficient talent to deliver on stated business objectives.
Professionalizing your business also means paying close attention to your financial results. Ideally, there is a history of audited or reviewed financial statements. This gives prospective buyers comfort as to the accuracy and validity of the financial information which is generally the starting point for determining the purchase price.
A succession plan is essential for a smooth transition of leadership and should be part of every strategic planning process. Identifying your key employees and making sure they are working at their full potential while also pinpointing leadership gaps and taking steps to fill those gaps will enhance business value and prospective buyers will take notice.
Always Plan Ahead
These steps should be taken well-before the time of sale, particularly if your transition strategy involves hiring new talent who would need time to acclimatize to the business. In addition, it is always advisable to talk to a financial professional to help you establish and work towards your goals at every stage of your business life cycle, whether or not that includes its eventual sale.