As a broker I meet a lot of business owners, usually they contact me when they want to put their business on the market and they often don’t really have much understanding of the sale process and either want to learn more about it, or they don’t want to engage with it at all and prefer to have a broker handle the whole project.
The problem with taking a business to market in the state you find it is that there are almost always issues that are going to come up during the sale process that could slow down, or even prevent a sale from happening. Achieving a sale (especially a premium price) is almost never as easy as writing a listing and waiting for buyers to come knocking. Unfortunately this seems to be the prevailing business model that many brokers in the industry work on at the moment.
There are almost always clear and often relatively simple things that can be done prior to going to market that will either make the business more attractive or given time, add value to it through the implementation of an exit strategy.
At its core an exit strategy is the process or re engaging with your business as its owner and most passionate advocate to ensure it is running smoothly and profitably and fix any issues that may have arisen over time due to too much focus on the day to day running of it.
Think about it logically; if you were selling a car then at the very least you are going to check the tyres, wash it and ensure that it is mechanically sound. You want the car to present well so making a small investment in it will mean that you can probably sell it quicker and get a better price for it. It is no different to your business.
Think about how a buyer is going to view your business, at the very basic is it clean? I recently had an inspection at a café where the feedback was that the café was dirty, I spoke to the owner and to his credit he did a deep clean and the business sold on the very next inspection.
There are many, many other factors that you can look at such as ensuring the lease is up to date and secures the business into the future; delegating some of the day to day management tasks, putting policies and procedures in place, training staff members, writing a mission statement that give staff direction. These are just a few, the list is probably never ending.
It is not unheard of that in implementing an exit strategy our clients have become so reinvigorated by the running of their business and decide that actually they don’t want to sell after all and I definitely class this as a win.
Implementing exit strategy is something that will allow you to exit your business on your terms, for a premium price and in a shorter space of time and it is never to early to start.