Getting your business (and you) ready for sale
So you want to sell your business? Generally the immediate question is how much is my company worth?
We know from first hand experience that for business owners there is more to consider than value alone, such as:
- How much money do I actually need for my lifestyle?
- Am I ready to sell my business?
- Is my business in the best position to be sold?
- How do I go about selling?
This article is about the other factors to consider when selling businesses.
How much money do I actually need?
£1million is a good round number that is often chosen. However, when you consider mortgages, daily expenses and fun factors such as holidays is £1million enough? Many business owners have developed a lifestyle that actually sees them spending £100k+ per year. A million pounds in this instance will not go very far.
Whilst you could work out your long-term requirements on your own, you may be better placed speaking to a specialist. A chartered financial planner for example, will simplify your positions and generate the £number you really need. Note, this figure is not necessarily what you need to achieve from the business sale.
Through the correct investments the proceeds of the business sale will support you as long as required.
Am I ready to sell my business?
We often hear stories of people who sold their business only to regret doing so; for example, the new owners might destroy their hard work. In reality, the biggest problem is the change that selling your company creates.
You will go from having a focus and working 50+ hours a week to nothing, just like retirement comes as a shock to many so does the sale of a business. This sudden shift impacts personal and professional life more than most people will admit to. Spending more time with your family doing what you want may sound perfect. Unfortunately, the combination of factors actually strains relationships.
Therefore, it is advisable to talk to people who have been through this process or engage a coach who can open up the conversation and prepare you for the transition.
Is my business in the best position to be sold?
Anyone who has worked with us knows that we use the Stages model to help owners identify where there business is growing. From Stages we know that there are good times and bad times to sell a business.
Too often business owners look to sell when they are feeling frustrated and stressed, unfortunately this is not the best time to realise maximum value.
Through planning an exit you can maximise the equity value of your company and achieve a better price. This can typically take 18-36 months to achieve and is not a snap decision. However, by creating an exit strategy the business will be more desirable and more valuable.
If you are unsure what stage your business is in contact us and receive a free business health check.
How do I go about selling my business?
There are a number of brokers around who will take a retainer payment to find you a buyer. This is generally not the best way to sell a company because it is very reactive.
Instead if you create a plan with a specialist you can control the process and maximise your exit value. A corporate finance partner for example will provide you a business valuation and explore exit options with you. There will be a fee for this service but in the long run the additional sale value and control make this good value.
We understand the challenges that come with selling a business, as such we have formed partnerships to help you through the process. This enables you to be guided through the processes by a team of specialists who understand each phase.
The initial free consultation will help clarify the process that will work for your business, it is then your decision on how to proceed. The events page lists when we are next running a session around exit planning.