Exit Planning is Necessary to Maximise the Benefits of Selling Your Private Business
When selling a business, success is dependent on factors beyond simply preparing the business to maximise the sale price. For owners and partners, being mentally prepared for the turbulent process and developing a plan to adjust to life after running your business is just as crucial as a well planned and executed sale.
Owners Mentality and Expectations
Often business owners have dedicated significant portions of their lives to building successful businesses, and moving on from this is a monumental right of passage. To ensure the best outcome advisors need to look at the holistic picture of their clients mentality and expectations. It’s important to understand a clients rationale behind selling, and ensure they have realistic expectations and are motivated by reasons they wont turn back on.
Why
If an owner isn’t mentally equipped to sell their business it can create a significant amount of unrest. If an owner has progressed a significant way through the sales process and then decides they no longer want to leave the business, it can result in a significant cost and loss of reputation for the business owner and advisor.
Life after the Business
Prior to entering the transaction process owners should plan for life beyond their company. This needs to include how they will occupy their time, and planning investment strategies to maximise how far their finances will reach. A well executed sale should not only give the company the opportunity to expand but also ensure the owner the reaps the rewards for their years of hard work.
Why
Similar to understanding the owners mentality, this is important as it assists the owners mentality with the process. If the owner has everything set-up for life post the sale of the business, they are more likely to be engaged and resilient through a potentially turbulent sales process.
Strategies to Increase the Businesses Saleability and Sale Price
There are numerous strategies to increase the sale price of a business. Sometimes advisors may identify key areas that can be addressed that will easily contribute to a higher sale price. These small factors can include extending lease terms, securing longer-term key customer contracts, and understanding key employees and their goals to ensure they will continue to drive the business post sale.
Why
It’s crucial to understand and implement these key strategies with advisors as ultimately a higher sale price for your business will benefit you in the longer term, and likely attract a more reputable acquirer with the intent and capabilities to improve the business and utilise key employees going forward.
Conclusion
Ultimately there are countless considerations when selling your business, but preparation not only of your business, but also from a personal standpoint is key to maximizing the benefits from the process.
Find Out More
Quinn M&A’s expert team of business transaction advisors can assist you to with all of your business acquisition, divestment, valuation and exit planning requirements. Contact Quinn M&A today on +612 9223 9166 or submit an Express Enquiry to arrange a confidential no cost consultation with one of our Senior Advisors.
