The Importance of Preparing Your Business for Sale Early.
I had lunch recently with a married couple who are of successful entrepreneurs. They have built a very nice business; it is profitable and well respected. It is a business that most of us would be proud to own. We were not meeting to determine if they were going to sell the business; they are years away from that. The purpose of the meeting was to learn what they need to be doing now, so that in 5 to 8 years their business will be ready for sale.
I wish more business owners thought this far ahead. Preparing your business for sale by operating it in a relatively turnkey manner is one of the most important things that a business owner can do. It makes the transition of ownership easier, increases the size of the pool of buyers and should make it more bankable. All of this should allow the owner to command a higher selling price. In addition to this, the day-to-day stresses on a business owner who operates a turnkey business should be less. After all, the people and processes for success are already in place and have been working.
The owners I had lunch with do not own a turnkey business. It still relies on both of them. One is the face of the operation; the other runs the back office. Since they are at least 5 years away from their anticipated selling time they have time to prepare. By meeting with a person who understands the business transfer process now, they can work to put the pieces in place for later.
Selling a business can be one on the most stressful processes that a business owner can be involved with. By preparing early, it may be possible to minimize these stresses and enhance your selling position. Waiting until the final days or for burn-out to set in is one of the biggest mistakes that a business owner can make. If you, a friend or a client own a business, there is no time like the present to find out what a professional thinks. Time spent can pay huge dividends later and make the journey that much more enjoyable.