How to maximise the saleability of your business through developing a business exit strategy!

Hi,

The difference between selling your business for little more than fixtures, fittings and stock or for a multiple of 3 or more (3 times the annual net profit) plus fixtures, stock and fittings, is very little when you plan your business exit strategy 3-5 years out.

At Business Exit Strategy we initially focus on three key areas in a business and get them mastered;

  • marketing
  • team
  • automation/systemisation
  • cash flow

From here, we are in a position to fund the reshaping of the business, the key points for you to focus on in the preparation of your business for sale.

  • The business should be set up so that you the current owner can step out and a new owner can step in and take over with little disruption to the day to day running of the business. Less reliance is required for the owner of the business with the bulk of the processes to be migrated over for the staff to implement and manage.
  • Keep your systems and processes well documented, up to date and utilised by the staff in the relevant part of the business that the process was written for.
  • Review the staff based on their implementation and adherence to the systems regularly and keep their personnel records up to date.
  • If your business has a trading record over five years or more, ensure you keep each years records and keep all the records up to date and accessible
  • If you invest in research and development, highlight this fact, report on your successes and factor this strategy and the success into your 5 year plan
  • Structure your business so that you have client contracts in place. More and more businesses have agreements with their clients for a minimum service or purchase amount annually. The more you can get your clients set up on a contractual agreement, the better the sale price for your business. If you don’t have contracts in place, start to migrate your clients across to one. It may take 3 years, now is the time to start.
  • Building a database of clients and a CRM to communicate with your clients is imperative. The more clients you can have buying from you for life, the less money you have to waste on buying or replacing them, the closer to capacity you can perform at, the higher the profit you will make, the better sale price you will get for your business!
  • Developing new products or services that can help you build your market share beyond your existing boundaries, to state, national and international markets will also feed your growth over the next 3-5 years
  • Structure your business to be merger friendly
  • Ensure all staff have less than 4 weeks holiday owing
  • Document your systems and processes for expansion and training
  • Have all liabilities managed and accounted for when documenting your last 3 years results and your next 3-5 year plan
  • Maximise profitability through holding less assets and investing in sales and ROI

When looking at purchasing your business, a potential buyer wants to see;

  • Market growth
  • Industry growth
  • Growing sales and profit
  • Consistent earnings

You can have market and sales growth in a declining market, provided you are focusing in the correct service, product and technology areas.

If you would like to know how to implement these strategies to sell your business for more down the track than it is worth at present…

Contact us today at Business Exit Strategy Phone: 1300 858 836