Follow These 5 Easy Steps to Increase Your Confidence When Selling Your Business or Franchise
Selling your business or franchise isn’t something that happens overnight, but the sooner you prepare for the eventual sale, the better. Planning for an exit will help you increase the valuation of your business/franchise and will also help you prepare mentally and financially when transitioning.
Here’s a surprising stat that we recently came across: According to a study by Securian-Financial Group, 60% of small business owners planning to leave their business in the next 10 years don’t have an exit strategy and aren’t working on one.
The world of business acquisitions and franchising is complicated and ever-changing, so it can be difficult to even know where to start. We’ve outlined five easy steps below that’ll help you get on the right track in order to prepare and create a valuable and sellable business.
1. Transparency: It is crucial that family, key management and key stakeholders are all aware of your exit plan. Communication and transparency is critical to selling as it can be a benefit or deterrent to selling effectively and efficiently.
2. Self Sufficient: Create a business that is not dependent on 1 leader, 1 employee, 1 supplier or 1 customer. A new business owner does not want to fear losing everything as soon as you decide to step out of the picture.
3. Recurring: Create a business that has profitable, growing & recurring revenues year-over year. Most buyers want to see 3-5 years of financials in order to apply some sort of normalized projection.
4. Timing: Know when to sell and when not to sell based on economical landscape. Does it make sense to do it right now? Do I need to do it right now? These are valid questions. For example, if you are looking sell a cab company, your time may have passed. But if you are looking to sell an eCommerce business, timing is great!
5. Post Sale Life: You earned it! What are you going to do after the sale of your business or franchise? Most new buyers would like the old business owner to stay on for a minimum of 6 months during transition, but after that, what will you do? Travel? Buy another business? Advise? Start a business? Whatever it is, ensure you don’t keep yourself in limbo, make sure you constantly have a purpose in order to continue living a meaningful life.
By taking the time to properly plan and build a more sellable and valuable business or franchise, you can become more confident about your exit plan, as well as your future!
From The Desk of BizON
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