What do Business Owners Need to Consider with a Business Exit?
Despite the fact that building a business to sell remains a common goal for business owners UK-wide, many individuals are simply unaware as to what is required on their part to successfully exit a business.
From maximising the value of a company to ensure a valuable proposition, to driving and retaining the right talent, there are many things a business owner needs to consider when preparing their business for sale.
The commercial team at Blaser Mills Law boasts extensive experience in supporting business owners in preparing for exit, and deem the following five points fundamental to success.
It starts with a mindset
Building a business to sell requires a very different mindset to building a business for a long-term career path.
Where a business owner would have originally made decisions based on their own goals and ambitions for the company, a business that is in a position to sell is one that has been built with a certain type of buyer in mind.
Therefore, business owners looking to eventually sell their business need to understand and implement this mindset shift as soon as possible, in turn, influencing strategic decisions to ensure the business is built and established as one of high value.
A business that is unique, disruptive and dominates your industry sector is far more likely to attract a potential buyer than one with no brand and market presence at all.
The sellable proposition
It can be both difficult and overwhelming to understand what it takes to make a business into a sellable proposition.
Therefore, it is important to gain as much advice as possible during the early stages of considering to sell your business, to not only provide insight into how much your company could be worth within the next 2, 3 or 5 years but to also support and influence strategic decisions around growth to make this projected figure achievable.
Though you should always keep in mind that you are building a business for sale, it is just as – if not more – important to focus on creating value. A business that is unique, disruptive and dominates your industry sector is far more likely to attract a potential buyer than one with no brand and market presence at all.
Be patient and adaptable
Many individuals build businesses with a view to exit within a quick, and often unrealistic, timeframe.
Building and selling a valuable business takes time and a lot of it – where a long-term vision spanning 5, 10 or 15 years, for example, often results in longer-term success.
In creating realistic timeframes to grow and sell a business, it is also vital to remain agile and adaptable. Many business owners have a clear plan for when they would ideally like to sell their business, often overlooking or turning down opportunities that come their way prior to this point.
These opportunities should always be welcomed and considered carefully, whether you think you are quite ready for them or not.
Many business owners have a clear plan for when they would ideally like to sell their business, often overlooking or turning down opportunities that come their way prior to this point.
Think with logic, not emotion
To complete the successful sale of your business, you need to detach all emotion from the entire process.
This needs to start from that initial mindset shift, where you should be thinking about how to longer-term make yourself redundant from the core operations of the company through hiring and retaining the right talent. From here, every hire and every strategic decision to support growth needs to be made with the view of either keeping or making yourself redundant to show that your business can operate without your involvement and in many cases actually benefits from doing so.
This process will enable you to create and implement a business structure that will allow a buyer to take the business forward easily and without you, making it a more sellable and valuable proposition as a result.
You’re only as good as your team… When selling a business, they need to be exceptional
A talented, loyal and driven management team who not only understand the day to day running of the business, but also understand how to take it forward, would be perceived as incredibly valuable for any potential buyer.
When building a business many founders underestimate the value of investing in quality talent, often looking at high salaries as too much of a cost burden.
However, in planning to exit a business, you need to hire and retain staff who are more talented than you, particularly if you own and run a service-based business where the right people are vital for growth and resulting success.
Ultimately, there is a lot to consider when planning to sell a business. The best point at which to seek advice is during this initial thought stage, to aid effective preparation from the outset. Remember, by failing to prepare, you are preparing to fail, which in the sale of a business is a risk too big to take.
For more information, visit: https://www.blasermills.co.uk