Business/strategic plans are not just for starting a business. Our experience is that they are a key to exiting your business. If you’re thinking of selling your business in the next one to five years you need to develop a Strategic Exit Plan to help you get your business ready for sale…and help you gain the greatest value for your business.
Here are five critical steps to Strategic Exit Planning:
- Develop a written plan that describes your goals and specific action steps. The goals should at least include revenue and profit improvement by year along with operational and customer improvement goals. If you accomplish your goals, buyers are more likely to believe your company can achieve the goals that are set after you sell. That means you may attract a higher selling price!
- Develop a track record of increased earnings. If the results you report are showing a positive trend you are more likely to attract a higher value for the business. If you do not show consistent revenue and profit growth, identify the challenges and begin projects to correct them. Show paths of improvement.
- Have the right people in the right seats. Make sure your key staff can manage the business without you there. If your business has been run by family members who may leave when you do, make sure you replace or augment them with people who will stay on after the sale. This is especially true for the owner/President.
- Customer loyalty proves the worth of your business. When customers repeatedly purchase from you, it tells the buyer that you have an on-going relationship that will probably continue once they purchase the company. Can you demonstrate (report) on this loyalty?
- Prepare accurate, automated business reports. The first thing buyers will want to see is how well your business has performed and that is typically through existing performance reporting. You should be able to easily create reports on top sales by customer, by product, by geography or business segment, by channel of distribution or however you segment the business. Profitability reports on the same areas are also good to have.
These five steps are the foundation for Strategic Exit Planning and can help you get your company ready for sale. Don’t wait until you want to put the company on the market…it may be too late to clean up your act. When you do these five things well, you will likely attract a higher value for your business.
Growth Strategy Partners LLC accelerates the revenue and profit growth and performance of privately held businesses by implementing its research based 7 Keys to Growth. We help owners maximize their business value and prepare for a sale.
To learn more visit www.GrowthStrategyPartners.com or call Chris DiCenso at 781.837.3276