Not thinking about your exit strategy just yet? You should be!
While your business keeps growing and thriving, you need to keep your end goals in mind. The goal of most business owners is to eventually sell. A successful exit takes years to prepare, and f you want the right price for your someday sale, you’re going to have to start sooner rather than later. Preparing your exit strategy beforehand ensures that the day-to-day operations of your business don’t go by the wayside while you’re trying to find a qualified buyer. Transworld Business Advisors of Indiana can help you make the most out of your investment and help you transition with ease.
Find the Right Buyer
While searching for or vetting the right buyer, you must begin to understand the different types of buyers. Some buyers will maximize your company’s value, while others will not. That’s because their goals don’t align with yours - and that’s ok - but you ultimately have the power to sell to the right candidate, so choose wisely, and let us help!
When you are familiar with the different types of buyers, you can focus your time and effort on resources that will continue to grow the company’s value and add to your success. As business brokers, we often see three different types of buyers: financial, internal, and strategic.
- Financial buyers tend to look for immediate cash flow and developed internal systems. They can see your business for what it is: valuable!
- Internal buyers are looking for something a little more well-rounded. Strong financials are important, sure, but internal buyers want to know about your corporate culture, product lines, and ease of transition.
- Strategic buyers are well versed in business and focus on their growing profits. If you are seeing an influx of strategic buyers, rest assured your product or service has strong brand recognition and potential for growth.
A Valuable Acquisition
A buyer only wants to buy because they see value in your business. How can you focus on showing the potential buyer even more value to ensure your asking price is met? Our advice? Develop a list of potential items in your company that the three buyer types we discussed before would care about. Adding this to your sales strategy drives the value of your business and lets the buyer know they have a great opportunity ahead. You don’t have to remember this all now - we know it can be a lot. Thankfully, you’ve got Transworld Indiana on your side to make sure you can check everything off your list.
Focus on Transparency
What is your business worth? If you aren’t keeping up with the paperwork, not much.
Buyers are required to review at least three years of financials. For you, this means that staying on top of financial, accounting, and legal matters are crucial to the eventual sale of your business. Just one lack of disclosure can make a seller seem like they are being dishonest and squash a buyer's interest.
As business brokers, we hate to see business owners get talked into a lower price because they didn’t disclose everything. Being upfront with your buyer about any challenges you have faced is the only way to get through the process in good faith.
Consider Your Future
You’ve been building your business for a lifetime. But, what’s next?
Take time to consider how your life will change after the sale of your business. Are you able to retire - and are you ready? Will you be using the funds to purchase a new business? Knowing the answers to these questions ahead of time can help you prepare your business for the price you want. If you’re still unsure when it’s time to sell, our advisors can help you with a plan.
Most business owners only sell a business once in their life, maximize your opportunity and start preparing today. Looking into selling your business or purchasing your next venture? Contact Transworld Business Advisors of Indiana for your next steps.
