Being a business owner can be extremely hard. Creating a successful business that’s worth selling can be even harder… Trouble is, most business owners have no idea how to build a plan or an exit strategy for when that time comes. Approximately 80% of businesses will NEVER be sold. But as you’ll read in this blog, there are several factors that most owners miss that could make selling their business much easier.
What is an exit strategy?
For most business owners, the idea of selling their business one day is an exciting one.
They start with an idea, grow it and eventually build it to the point that it becomes profitable and worth something.
But when the time comes to sell, how many are really prepared??
Many owners don’t actually start preparing an exit strategy until the very end.
And at that point, most prepare a very short timeline for the process to happen and rush through decisions just to get it over with.
And sure, you can do that.. But to close these deals and change ownership, it often means business owners end up selling for A LOT less than they expected.
Every business’s exit strategy is unique
Every business is different.
Your exit strategy should be carefully crafted based on the size and type of your business.
For instance, if you own a business with a partner, a possible exit strategy is to sell your share directly to your partner.
If you’re the sole owner, you may want to sell your ownership through a strategic acquisition, which can give you the best liquidity in the shortest amount of time.
Regardless of the type of exit strategy you need, experts agree on one thing: business valuation is KEY.
The business valuation essentially examines your business as a whole to determine its overall value.
What is the value of your business?
If you are ready to sell your business, the number one question at the end of the day is how valuable is your business?
For some, this can be the biggest problem.
A lot of owners create their business based on the premise that they control EVERYTHING.
In essence, if they burn, so does the business.
They become firefighters and don’t end up creating something with REAL value.
This is why a lot of businesses can’t even be sold…It’s completely reliant on the original business owner being involved.
What should you do?
In an ideal world, every business would have two things: value and an exit strategy.
Depending on how long your business has been under operation, it’s best to start thinking about these things while you’re establishing your business.
If you want to learn how to develop an exit strategy or build a business that is worth selling….