Supporting Businesses On A Journey To Excellence
"Prepare Your Business For Sale And Maximise Its Value…"
International research shows that 40% of business owners are planning to leave their businesses within the next five years. There are many reasons why a business owner wants (or has to) sell a business. These include:
- retirement;
- health reasons;
- death;
- emigration;
- change in lifestyle;
- new business opportunity; and
- change in personal circumstances, for example divorce.
Exit Strategy
It is therefore not surprising that a very high percentage of business owners think that it is important to have an exit strategy or "plan to sell" for their business. However, only about 10% of owners have a documented strategy to do so and very little come of their good intentions in this regard.
As a result most people can relate a tragic story involving family or friends where in the absence of a proper exit strategy a business which had been operated for many years came to a sudden end at the untimely death of its owner. And often the impact on families and employees left without an income is devastating…
Valuation And Exit Readiness Assessment
But where do you start to prepare your business for sale? The starting point is a Valuation and an Exit Readiness Assessment which:
- Provides you with a valuation of your business. Once you know what the value of your business is, you can start planning for the future. If you are happy to sell your business at that value, you may be able to offer it for sale within a relatively short time. If not, you can start your business on a growth strategy to improve its valuation.
- Points out some of the potential risk areas which may negatively impact on the value of your business. Two businesses with the same recent sales and profitability may be valued at totally different valuations. The reason for this is that they may have different risk profiles. Your goal when you wish to sell your business is to position it as a great "low risk" investment for a potential buyer. This will ensure a higher potential valuation.
- Helps you to determine the risks of your business not being able to turn the valuation into cash. In most businesses there are risks which have the potential to destroy the value of your business. Addressing these risks is very important to ensure that the potential valuation of the business can in reality be turned into cash.
- Makes recommendations which may enable you to improve the value of your business in the short to medium term by 100% and more. Most business owners do not have the time to do a detailed analysis of their businesses in order to determine the exit readiness of the business. However, it is also a fact that most businesses have areas of weakness which prevents a business from achieving a higher valuation. Often these weaknesses could have been addressed with relatively little cost and effort had they been identified in time, increasing the value of the business. Also, in a business that is not properly prepared for sale, there are certain weaknesses which are invariably exposed by potential buyers during a due diligence process before they make an offer on the business. The weaknesses are used by potential buyers to reduce the owner's asking price.
Free Information Pack
If your business has been in operation for more than three years, you qualify to request a FREE Information Pack on how to sell your business at the best price. Please click here.
(PLEASE NOTE THAT THE INFORMATION PACK IS ONLY AVAILABLE IN AFRIKAANS).
