6 Steps to Selling Your Business for Maximum Profit
Have you ever thought of starting a business? Or selling one you currently own? Or maybe you know someone who has considered selling their family business. I'm honored to have a friend of mine, Michael Mitchell, write this guest blog. Michael is a well known business broker in the Mid Atlantic, and he explains where you need to start.
A Good Exit Strategy can be worth a Million Bucks.
Selling your business can be an organized process where each step maximizes profit and your advance preparation expedites the sale, or it can be a dismal failure full of gut wrenching interactions and tremendous amounts of your money left on the table at the close. Fortunately the choice is yours. A good Exit Strategy starts with simple awareness of the process of selling and can be implemented in advance in your day to day activities with little additional effort. Thinking of the sale of your business in health terms, consider the sale with no preparation as last minute surgery with no anesthesia, and a properly done Exit Strategy as preventative medicine that will keep you out of the pain and cost of surgery. Your Exit Strategy begins with awareness that one day you will sell your business. Reasons vary with each business owner and can be as simple as boredom with the company that you have built, to complex issues such as health or divorce. Only you know when it is time for you to sell. However having implemented a written Exit Strategy will assure maximum profit at the sale and great peace of mind should you be selling under less favorable circumstances such as the mental duress of a downturn in business or poor health. Some items you will need to consider in your planning process include:
Step One Setting Exit Objectives: Do you know your retirement goals and what it will take—in cash—to reach them?
Step Two Determining Business Value: Do you know what your business is worth today?
Step Three Increasing Business Value: Have you identified the best ways to increase the value of your company?
Step Four The Third Party Sale: Do you know how to sell your business to a third party without getting killed by taxes?
Step Five Transfer Your Business to Insiders: Do you know how to transfer your business to insiders (family members, co-owners, or employees) for cash rather than give it away?
Step Six Protect Your Business: Do you have a continuity plan for your business should you die or become disabled?
Once the decision to sell is made, contacting a business broker to discuss the market conditions and the various options you have to sell your business is imperative. Most businesses are sold to other individuals through a broker who facilitates the transaction, working in your best interest. Buyers can be entrepreneurs that have the same zeal you had when you started your business or industry players that will purchase your business to expand or enhance theirs. A qualified business broker can be instrumental in helping you write a good Exit Strategy that encompasses the sale scenario viewed from every angle.
It is my job to orchestrate this process and help you achieve your goal. When the time is right for you to start, I’ll be there to help. Please feel free to call me with questions and or assistance. Michael Mitchell is president of Business Research Group, LLC
www.BRGBrokers.com Located in Richmond, VA, Business Research Group is the Mid-Atlantic area’s leading seller of privately held businesses. Please feel free to call us today at (804) 381-6667 or click here to email us at Info@BRGbrokers.com to discuss selling your business, a business valuation, or to learn more about the process of selling a business.
- Michael Mitchell
Business Research Group