You started your business between 1998 and 2001 and you have been thinking that it might be time to sell. So, WHAT ARE YOU WAITING FOR?
Do you know that it takes anywhere from 1 to 7 years to sell your business?
And, that's if you have clean, very clean books. In other words, everything you bring in (income) goes directly to your expenses. At the end, your profit and loss statements (at least the last 3 years) show clearly, and match your tax returns, that your income pays off all expenses and then you were left with the net profit. This is what a buyer is interested in.
Really, you say? As a business owner, you have been using the BUSINESS, as the bank for your car, your phone, your entertainment, your other essentials(?) Hmm, what do you really have to sell? A great brand, a powerful client list, contracts, key employees, secret sauce, maybe even YOU?
Understand, the buyer's major interest is $$$. The buyer is either buying a job or a bottom line.
Your potential buyer believes that buying your business means that cash will follow. The goal for the buyer is that the ROI (return on investment) will happen within 3 years, if not before. Perhaps your buyer is also buying the opportunity of a new geographic location for the business (s)he is already in. Ahha! Expand the business with a new location and share the marketing of a proven brand with a business that is already set up. Economies of scale are clear. Save on all professional services (legal, accounting, payroll, HR, business consulting, marketing and PR, most IT). Buy the business and add to the bottom line in abundance.
In any case, what's a woman in business to do? The answer is to spend the time to make sure the value of what you have built is clearly communicated to every buyer -- particularly the right buyer.
As someone who went through this process personally, and has worked with many men and women desiring a successful sale, I can tell you, YOU the entrepreneur (businessowner) better know what your goals truly are because this is not an easy or expedient process. You need to know exactly what your goals are ahead of time and plan for your exit before you can expect or get an equitable outcome (or sale).
I know too many (men and women) business owners, who don't take the time to plan this very serious strategy to make sure they get the true value of what they have built.
I naturally assume that, like me, you have spent your blood, sweat, tears and $$$ building your business and that you want to make sure that it was not for NOTHING!
Sell at the top of the market! Yes, I know that the economy is in the shitter - but it is time to plan now if yiu want to get to a fair sale within the next 3 to 7 years.
So, what will you do first?
Make sure your books are clean - that means money in goes to money out and the leftover is profit.
Second, make sure you keep your plans quiet (confidential) (secret) -- this means it is no one's business but yours. Most sales for small business actually benefit employees - so why concern them with something that will eventually help them.
Third, decide who your potential buyers are and pay attention to them. Connect with them when appropriate and make sure to get to know the CEO or president. You are in the same business so you should be recognized as a colleague.
Fourth, do whatever you can to get contracts from your customers -- contracts are included in the assets of your business.
Fifth, develop an asset list and be familiar with what you have built and what is valuable in your market.
Finally, make sure that you have a professional team that is there when you are ready to make the decision to sell. A competent CPA (critical if you want to save taxes and make the most of any long term earn out, bonus or salary), lawyer (someone who understands your business and YOU and knows what you want to accommplish in a sale), estate/financial planner (particular of you are older and need to make sure proceeds are safely planned) and insurance agent (someone who understands the poeple in your business that increase the value of the business). Your team will see you through the sale and protect you and the value you have built.
You may seek out a businesss broker, depending the size of your business. Make sure the broker understands your goals and business and then spend your time going forward planning on your transition.
What do you want to do with the rest of your life?
If I can help.....email me at vicki@vickidonlan.com
Life is shorter than we think when we are busy in the day to day of building a business. Please don't let life pass you by --- this really is a great time to be a woman --- take time as soon as you can to live your best life.
