For any business owner, even those who aren’t directly considering selling in the near future, having a handle on basic exit planning steps is still important. A good exit plan contains several elements that help you achieve business success, plus keeps you prepared when either market factors or your own desires dictate that the time to sell has come.
At Utah Business Consultants, we’re proud to high-quality business broker and business exit planning services to a variety of clients, from those looking to sell right away to those simply trying to be prepared for the future. In today’s blog, we’ll go over a few themes or questions to go over for yourself if you’re wondering whether you’re ready to exit your business, including both practical and personal factors.
Assess Business Value
First and foremost, many of the answers you’re looking for here will present themselves when you take inventory of the business’s value. While you can get a broad idea of your business’s value with certain online tools, we recommend working with both your internal accounting team and our business brokers to get a clear, precise value.
Simply put, it’s very common for business owners to find that the actual value of their business is much different from what they think it is. There are several market factors that play a role here, and it’s important to remember that the marketplace makes the final call here.
Do You Truly Want to Sell?
If you’ve done the legwork to obtain a precise business value and the numbers line up favorably, the next big question to ask yourself is often a personal one: Do you truly want to sell? Some get right up to the one-yard-line before deciding they can’t leave a business they’ve built from the ground up.
This decision might also be financial, however. Your valuation efforts might reveal that this is a poor time to sell, either based on unfavorable market conditions or some issue with the business itself. This just underscores the importance of a precise, accurate business valuation.
If you’ve moved through both the above steps and have determined you still want to move forward with the sale, it’s time to get organized. If you are not already working with a business broker, now is well past the time to get in touch with one. The goal will be ensuring that any prospective buyers will have the proper information on the business, from prior year profit and loss statements to tax returns, lease documents, loans, franchise agreements and many other potential items.
For more on the themes and questions to ask yourself when determining if you’re ready to exit your business, or to learn about any of our exit planning, business valuation or business brokerage services, speak to the staff at Utah Business Consultants today.