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Basic Exit Planning Requirements, Part 1

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Whether you’re looking to sell your business in the short term or not, all small business owners should be invested in basic business exit planning strategies from the very beginning. An exit plan helps keep your business moving in the right direction, plus helps create a trigger event that signals it’s time for you to exit the business.

At Utah Business Consultants, we’re here to help. In part one of this two-part blog series, we’ll look at four basic areas you should consider as part of your exit strategy.

Sourcing Your Buyers

Many business owners simply assume that someone will want to buy their business when it comes time to sell, and this is a big mistake. Only about 25 percent of saleable companies actually accomplish their exit, according to exits.com.

An important part of the plan is keeping an ongoing list of potential buyers. These may be people who have approached you in the past about your business, or competitors in your field who might be interested in buying you out at a certain point.

Showing Growth Patterns

Potential buyers for your business want to see good growth patterns, with steady and predictable growth they can count on. The occasional dip here and there is totally understandable, as long as you can offer an acceptable reason why they took place. Major growth swings, however, could be a red flag for a buyer.

Reoccurring Revenue

Buyers want to see that you not only have revenue, but also the form in which it’s paid to you. Potential buyers always enjoy seeing services that involve predictable revenue sources, such as subscription-based products or services. They also like seeing automatic advanced billing, with reoccurring payments for revenue.

Standard Operating Procedures

If you don’t have a written set of standard operating procedures, you should get to work on this immediately. This should essentially be a plan that would allow your business to function even if you disappeared off the face of the earth tomorrow – things like your executive strategy, core values, marketing and sales plans, management practices and basic operating procedures should be included. If you were looking at two possible companies to buy that were similar, and one had these procedures laid out while the other didn’t, which would you choose?

For more on basic elements of the exit strategy, or to learn about any of our exit planning services, speak to the pros at Utah Business Consultants today.

5 Mistakes to Avoid When Selling Your Small Business

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By Debbie Allen

Updated May 11, 2017

Everyday small business owners (retailers) make drastic mistakes when selling their business and lose thousands of dollars in the process. All their hard work and long-term investment goes down the drain. As entrepreneurs, they had once dreamed of owning their own business and building it to success. They then plan to reap the rewards in the form of a successful business sale. Sounds like a great plan! But, making the sale is not as easy as it may appear.

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Tips for Marketing Your Business for Sale

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When you’re looking into selling your business, there are a ton of factors to consider. Proper business valuation is huge – going too high or too low can both have enormous financial consequences if you get it wrong. There’s also the issue of any outstanding debts, expenses or other finances to complete before any sale can be possible.

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The Sweep Precedes the Inspection

The Sweep Precedes the Inspection

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Business owners often hear the question, “Are you ever going to put your company on the market?” The response of the potential seller is usually unique, varying from, “Sure!” to “not in a million years” to “everything has its price.” Most do not think of a specific date, but rather place the broad “when the time is right” qualifier over their sale. …Read More

Selling Your Business to Employees

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Setting the Rules

Structuring a transaction through an employee buyout should accomplish the same objective as selling to an outside buyer. Your objective is to structure a sale that maximizes value while minimizing risk (tax consequences included). If an employee group can fulfill that objective, the offer is worth considering; if not, look elsewhere.

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The Downsides of Overvaluing Your Business

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When thinking about selling your business or preparing to do so, assigning the proper value is very important. An entire segment of our customer service at Utah Business Consultants is dedicated to helping people like you consider all the factors involved before setting the right value on your business, and we know how vital it is.

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Exit Planning Service for Businesses

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Utah Business Consultants Offers a Comprehensive Exit Planning Service for Businesses

Utah Business Consultants, a trusted business consultancy firm in Utah, offers a comprehensive exit planning for businesses. This service includes a ten-step process that will help business owners exit a business with minimal risk.

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