Business Exit Strategies

We understand that you’ve worked hard “in” and “on” your business so you certainly don’t want to regret selling your business for less than its worth due to poor preparation. The best time to sell your business is when sales and profits are strong. This helps to generate interest from buyers and places a higher value on your business. 

However, you may need to sell your business quickly due to personal reasons and having a plan ready will help to get the best possible outcome. You only get one chance to get it right, and as we have seen many times the opportunity or necessity to sell your business may occur at any moment.
 
Failing to plan is planning to fail, and ideally you will want to begin preparing your business for sale well before you put it on the market. We are often heard advising clients to “always conduct your business as if it is for sale”, and in this respect you want to ensure that your business is represented at its best and show prospective buyers the benefits of buying your business. This could be as simple as making sure your business is clean and presentable, through to writing standard operating procedures whenever you set up a new procedure, and keeping your financial statements ready.

To Sell or Not To Sell

If you’re considering selling because your business is not performing then please chat with one of our advisors regarding alternatives to selling.
 
A number of strategies may exist and you can also look at options such as:
 
  • Refinancing – We can help to assess whether your short-term debts will become more manageable with long-term financing.
  • Succession Planning – Developing a detailed succession plan can help you to find and train a successor to take over your business. Speak with our team about suitable strategies.
  • Strategic Alliances & Joint Ventures – There are often businesses looking to form vertical or horizontal alliances.
  • Business Benchmarking – By utilising our benchmarking tools you can measure your performance against similar-sized businesses in your industry. This helps to identify opportunities to improve your business.
  • Mergers & Amalgamations – There may be a variety of cost efficiencies, benefits and competitive advantages by merging or amalgamating with another business.
  • Asset Sale – To increase cash flow you may consider selling certain nonperforming assets.
  • Step Out – Make your business self-reliant by building a team or finding a replacement for your role in the business, whilst you still retain ownership.

Planning For The Sale Of Your Business

There is much to plan when selling your business, from deciding when the best time to sell is through to demonstrating the true profitability of your business.  Meet with our Newcastle Business Accountants to discuss further

Making Yourself Redundant

Will the business run without you? Consider how many hours you work in the business, and the expert knowledge you have of your business. One of the main concerns of a buyer is the risk that the business will fail when you, the business owner, walks away. It’s hard to sell a business that is dependent on you.
 
It is advisable to systemise as many functions and procedures as possible. Even the daily tasks that you take for granted may be a challenge for a new business owner. By producing a standard operating manual with basic step by step procedures for each task, ensures a smooth hand over and will minimise the perceived risk by the potential buyer.
 
Each employee within the business should also have a clearly defined role, designated set of tasks, standard operating procedures and measurable and quantifiable outcomes. Consider when team members are away on holidays, how easy is it for a colleague or temporary worker to manage that position. A potential buyer may also be concerned that key employees will leave the business soon after the sale, and the buyer may need confidence that the positions are manageable.
 
More…    For more information call for our free "Business For Sale" e-book.
 

To discuss your potential business sale or business exit strategies chat with our Newcastle Accountants at Leenane Templeton Chartered Accountants & Business Advisors today.