Exit Strategies - Selling Your Business

The most common exit strategy for a business owner is to sell the business to another person or company. This is usually done privately or through a broker.

One of the most challenging issues when selling a business is how to price the business so that you achieve your desired price and still meet market acceptance.

This is where the your exit strategy plays a significant role during the process, but only if you have realistic desires and if you allow an appropriate timeline.

Selling your own business will also be easier if you can:

• show year-on-year increasing profitability
  
• create a high-quality product or service
  
• develop an innovative product or piece of intellectual property
  
• build a strong customer base
  
• recruit a high-quality team
  
• maintain premises and assets in good condition

In principle there are several factors that will effect your sales price:

1. Time remaining on lease
   
2. The right time of the year to sell (sell at the beginning at the good season)
   
3. Having secure transferable contracts in place
   
4. Professional presented information
   
5. Verifiable information
   
6. Owners involvement in business
   
7. Growth potential
   
8. Plant and Equipment
   
9. Steady and reliable staff

The best thing you can do to maximise your sales price is remove yourself from the business.

That’s right!

Minimise the amount of time you spend in the business.

By doing this you demonstrate you have a sound business that is not reliant on you. Investors are likely to pay more for a business under management than an owner operator.

Author Credits:

Article written by Nathan Kelly, Managing Director, Baron Consultancy. Selling Your Own Business is a concept that more small to medium sized business owners are choosing to do. SYOB assists small to medium sized businesses prepare their business for private sale.