Exit Strategy - Selling Your Business
One of the most crucial decisions in the life of a business is deciding how you will exit the business - will you sell it or pass it on to family members?
Plan for your retirement and the sale of your business
Exit strategy planning covers the key steps to prepare the business for that moment.
Developing and implementing a well-designed plan is essential to the long term success of the business you've created. For your business to be a truly saleable asset, you need to create systems that make the business less dependent on you.
People want to buy businesses that work, not businesses that are run by people that work and work and work. Exit planning is an on-going, ever improving process and is just as much about working ON your business as planning for the future.
Due diligence is about ensuring that a buyer is fully informed and that there will be no future unpleasant surprises. It enables the buyer to rely on his or her own investigations, information gathered and judgment about whether or not the business is a sound investment. The business records need to be sufficient for the purposes of due diligence by a prospective buyer, trustee or extended family. We can guide you through the due diligence process.
The Exit Plan
Exit strategy planning should start up to 5 years before the business is sold. Some of the issues to consider are:
- Review the business structure and remove non-business assets, expenditure and debt.
- Document your systems and procedures
- Identify and register your company's intellectual property
- Prepare and implement employment policies
- Prepare a strategic plan
- Identify and document all business relationships
- Have the business valued to obtain a realistic expectation of its current value and future possible value
- Develop strategies for profitability, growth, systems development, staffing and structure.
- Involve advisors such as accountants, lawyers, bankers and business brokers
- Prepare an information memorandum about your business to give to prospective purchasers.