So often business owners who are nearing the time to sell their business jump to the end of the exit planning process and begin approaching business brokers or investment bankers. Sometimes this is appropriate. But most of the time the business owner can better achieve their goals if they take the time and effort to go through a structured exit planning process that help them identify their goals, enhance the value of their business, and have control when exiting their business.
Although there are many steps that need to be taken in creating and executing a well-constructed exit plan, the following are the top six high-level steps that we recommend be taken in selling or transitioning from your business:
- Use A Professional
Use an outside professional who will guide you through this process. This could be a business transaction attorney, an accounting firm with experience in exit planning, or professional exit planning professionals.
Conduct a thorough investigation to define your needs, goals, and objectives of the business transaction. Take an honest look at the value of your company as viewed by prospective buyers.
- Estimate your Valuation
Research to see how much your company is worth today and would be worth under other targeted conditions.
- Create a Value Enhancement Plan
Develop a Value Enhancement Plan to increase the value of your company during your the preparation phase before selling your business.
- Update Your Personal Plans
Create and/or update Estate Plans and Wealth Management Plans to determine how the sale of your business will impact these plans.
- Create a Plan That You Will Follow
Create a detailed Exit Action Plan that identifies the many steps that are required to maximize the value of your business and control the way in which you sell or transition from your business.