For many people who have devoted their time, resources, and energy to build a business, it is natural that no matter how things get, selling it off would be the last option. For many others, this is not even an option. There are many reasons why a business owner will want to sell his or her business off and they are not farfetched.
Some of the reasons include: retirement, burn out from being drained and losing motivation, owners of a business wanting to cash out to reap the rewards of their efforts, health issues, to pursue new ventures, partner disputes caused by interest misalignment, financial challenges like shrinking cash flow, bad business decisions, debt, a decline in profitability as a result of negative industry changes as well as economic and political downturn.
At least one of these things will befall you over the course of your business lifecycle. Therefore, it is important to start preparing before that time comes so that it isn’t too late to get a good deal out of it. Preparing a business for sale can take years of planning and this is the reason you need to start planning now. Most business owners believe that growing their businesses to serve their financial needs and growing a business to sell, are mutually exclusive. But, in fact, both can be accomplished at the same time and is often a much better route to take.
Prepare now that you see the light and not when you feel the heat
To make this possible, you have to concentrate on preparing your business well ahead of time to enable you find strategic buyers who will best optimize your business potential. You also need to develop scenarios for possible sale. This means determining well in advance, by category or by name, who is a likely buyer of your business, so you can think about why they will buy, what will be attractive to them, and how you might need to adapt your business in advance to fit their preferences. It is not enough to expand your business or create value. You have to create sellable value that is in line with your potential buyers’ value requirement.
The question therefore is not whether you will sell your business; the correct question is how ready will you be when the time comes? There is nothing wrong in being in a sale-ready mode; in fact, it is a helpful thing that will help you rack top dollars. Whatever the reason for selling your business is, there are three important questions that you must first answer:
How much money do I need to live a life of true financial liberation and wealth?
What am I doing in my business today to deliver that amount of money to me?
If I was an outside investor making a decision to buy my business, what would I need to see or what would need to be in place for me to buy?
Your goal as a business owner is to accumulate business wealth as well as assets that have predictable future income that spark the interest of any investor. The main types of asset a business can own that can make it sell at top dollar are usually either two; its present asset and its future asset. Present assets are today’s sales and profits while future assets value include the relationships with your customer initiated today and nurtured to provide several future pay days. Future assets are more important than present assets, because present assets represent only income being spent. However, a future asset is an equity that can be seen and sold to an Investor. Businesses with only present asset values are solely about what the business is doing today to earn income, and because income gets spent as you proceed in a business, businesses with high present asset values are not potential high dollar sales business.
On the other hand, businesses with present asset and future asset structure do the things that earn current income today but also build and own future equity assets. These future equity assets are the things that make businesses valuable because an investor knows that he or she can hit the ground running with cash, almost immediately. Solid wealth is not created from income-only businesses; rather, it is created from owning valuable present and future income generating assets.
There are about 14 future assets that you need to create in your business to help you attract potential investors that will buy your business at top dollar when the time is right.
To get the 14 future asset info graphics, kindly fill the Form Below.
Whether you are planning to sell your business in ten months, ten years or not even planning to sell at all these future business assets will increase the value of your business. You no longer have any excuse not to profit from your years of hard work. These 14 future assets is all you need to kick start your journey to top dollar sales. If you need help implementing any one of the fourteen assets, we have a team of professionals that can guide you.
If you delay paying the immediate price of preparing your business for sale, you will pay the ultimate price of selling your business at a giveaway price
Grace Agada-Senior Wealth Advisor and Founder Create Solid Wealth. Article was First Published in The Business day Newspaper.