At some time we are all going to exit our businesses. Hopefully there is plenty of time plan however circumstances do change from time to time. It’s possible you haven’t given business succession planning any in depth though.
Even if you are not immediately considering selling having your business in saleable condition at all times can pay dividends now and at the time of exiting the business.
Business Succession planning can be as important as day to day planning.
We are all going to exit our businesses sooner or later. Hopefully, in a controlled and profitable manner.
The full list of factors that drive business value are to extensive to cover here but these are a few areas to consider;
Identify who might buy your business
By understanding if there are potential buyers you can identify sometimes changes in the business operations can make it more appealing to that type of buyer. The buyer could be Family, staff , a competitor or an investor.
Know your businesses value
Even if you’re not selling it’s an interesting process to go through having a broker look at your business to reveal its potential value. You can use this value as a basis for business improvements to add value when you do finally exit. It can even become a benchmark KPI to review every year or so. Having a long term relationship with a business broker is not a bad thing.
Consider the owners involvement in day to day operations
Businesses that reduce their reliance on an individual, often the owner, are more appealing to a broader range of buyers, by working on reducing the reliance on an individual you improve you saleability.
Policies and Procedures
How well documented is everything, could a new owner find information when needed?
Intangibles or not so easy to measure
Included in this you can say staff , they are generally the most valuable asset in a business transition. Are they prepared and understand the sale is occurring? They really can help with the sale process and help give the new owners confidence the business will successfully transition.
In addition other intangibles such as patents , trademarks, brands , contracts and databases to name a few are items adding value to your business.
Are supplier and customer relationships with the business or the owner, if they rest with the owner it has a negative impact on business value.
Now is the time to start planning the succession for your business and maximise its value, we have some specialised processes for determining the influence non-financial aspects click here to take a very short survey that may give you some insight.
Or contact us and we’d be happy to have a no obligation discussion