What is the advantage to planning ahead when it comes to selling my business?  Why not just put it up for sale when I'm ready to retire?

One of the biggest mistakes we have seen clients make is starting to retire the business they want to sell.  Sometimes as business owners move closer to retirement, they start working less hours, revenue starts to slip, costs rise as their watchful eye is not on the day-to-day operations as much and profit is hit hard.  Remember, profit is the ultimate value driver for any business in any industry, with a few rare exceptions.  Accordingly, the value of your company can drop significantly after only one or two years of slowing down operations. 

It is crucial to plan your company's exit strategy well in advance.  If your children are not interested in taking over the company and your plan is to ultimately sell to a third party, there are many things that can be done in the years leading up to the ultimate selling time that will maximize your company's value.  Of course, not letting revenues and profits slip is a great start, but remember that the value of a business is determined by multiplying profit by a number, which accounts for the risk of your business.  Therefore, value can also be increased by lowering the risk and, by doing so, increasing the multiplier that a buyer would assess. 

There are numerous ways to lower your company's risk.  Some quick examples are reducing the company's reliance on yourself, solidifying customer relationships and cleaning up the financial records.   We have often heard, on both sides of transactions, that messy books make a terrible impression on how a company is run.  Of course, these are only a few (none of which that may apply to your company) of countless issues that can be addressed in the exit strategy planning process.  

 We would be pleased to meet with you, do a detailed review of your company and prepare a program that would result in you maximizing your company's value in preparation of selling. 

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