It might seem a bit morbid or sad to think about it now, but one day you’ll be leaving your business. It could be because of a sad reason, but it could also be exciting – you’ll be moving on to something new or retiring to enjoy world travel or time with the family.
Your exit strategy is a plan for ending involvement with your company. Usually this means preparing the business to be sold on to another owner. If you have a clear exit strategy in place, you’ll likely fetch a better sale price, so it’s definitely worth putting into place now.
Here’s what you need to have in place to make sure you’re ready to exit your business:
1. Tidy up the books
The first thing a potential buyer will look at is the books, so make sure you’re profitable and . Businesses with books on paper or spreadsheets, IRD debts from late payments, or finances will struggle to find buyers.
If you know your books are a mess and you can’t see yourself tidying them up any time soon, you need to get a bookkeeper in place, stat.
2. Make yourself redundant
Too many business owners are so “in” their business that if something were to happen to them the business would keel over. Beyond your succession plan, it’s pure good business sense to put systems and processes in place to make sure the business can run smoothly without your input. This will come in handy if you’re ever laid up with a broken leg or stuck on a desert island.
3. Write down everything that happens in your business
Start creating handover documents now. In an ideal world, prepare documentation so a total stranger could pick up your business manual tomorrow and start running things. It’s a big, annoying task so the sooner you get it started, the faster it will get done.
4. Get valued
If you’re thinking you’d be interested in selling, it pays to get a guideline valuation for your business. Once you’ve got that number, you can figure out how to build additional value in the business before you exit.
By figuring out what’s holding back your valuation or what strengths you can grow, you’ll set yourself up for a solid sale and exit.
Exiting your business is as inevitable as taxes. Making a plan now ensures that you’re the one in control when the time comes, and that the company you build will survive long into the future.
Here at Change, we’re all about positive changes to improve your business. We can provide you with that year-round visibility that’s so key to being successful in business, all while taking a stressful job off your hands. Go on, talk to the team at Bookbird about your business needs.