We keep paying attention to the squeaky wheel. Of course, we do, it’s squeaking, we know it needs fixing and we know how to fix it.
All day long most of us are focussed on running our businesses, looking after our clients and dealing with our suppliers. And if we have a spare moment, we fix that squeaky wheel.
This is all fine and dandy, we must look after these things; they are important. But when do we look at the long-term future of our business? Rarely, and sometimes only when it’s too late.
Now, if the plan is to exit your business, this is not going to go well for you if you don’t prepare. Rarely is the offer that randomly arrives on your doorstep the best deal for you.
To maximise the value of your business, and to give you a range of options to exit your business, the best start point is to get a report on your business from the perspective of the buyer. This must include a financial valuation, but it should also include commentary about the attractiveness of your business and the risk levels involved.
The value of your business has nothing to do with the number of hours you’ve put, the low salary you paid yourself, what a friend sold their business for or what your business owes you. Really, it doesn’t. Your business value is determined by the buyer. And, when you understand that you are ready to start making your business as attractive as possible to any potential buyer.
It can be great fun working on improving the value of your business. Often this may require outside help, but this should help you get the most from your life’s work.
The journey from deciding to exit your business to the day cash lands in your personal bank account is likely to be a least a year, possibly three years. The real start point is when you read the valuation report that takes a real world buyer’s perspective..
