Business Exit Timing is of Paramount Importance if You’re Thinking of Selling Your Business at Anytime Within the Next 3-5 Years.
…. And Here’s Why ….
The odds are very difficult and they are stacked against you!
If you take any 100 businesses and put them up for sale, you will find only 20% of them will ever sell, and the remaining 80 will end up closing their doors in liquidation sale.
Leaving a trail of broken promises, shattered dreams, and jobs lost.
The biggest mistake most business sellers make is that they don’t have an exit strategy.
Unfortunately most business owners wait until a random catastrophic event occurs, and unfortunately, Murphy’s Law shows up, and it happens at the worst time. It happens when there is a downward trend in business for one reason or another and the business isn’t making as much money as it should be.
So what do you do to correct this? “Business Exit Timing” is Critical and that requires you to have a Business Exit Plan.
Here’ How To Get Started:
You need to have your books in order – STOP living out of the business!
Most business owners live out of their business so they can decrease their tax
liability. They run auto expenses, travel and entertainment, cell phone bills, and other expenses through the business.
This strategy is legal, ethical, encouraged by the IRS, and of course, edified by the CPA’s.
The problem with doing this is, these expenses need to be added back to the business bottom line profits, and the more you add back, the more doubt comes into the picture from the buyer.
A much better way of doing this is, pay the expenses out of your personal account and take an owner draw from the business. This keeps the books clean and concise. Yes, you might have to pay a little more tax, but the payoff will dwarf the amount of tax you pay when you sell.
It’s CRITICAL to know the numbers and have your books in order.
B.S. Books will only get you B.S. offers when you sell – period.
About 95 percent of business owners have no idea what their brand is or what it means. While branding isn’t everything, it certainly has a lot to do with business value when it comes to “Good-Will.”
Here are 5 Brand Fundamentals:
Each and every one of these are major contributors to the value of “Good-Will” and when you get to the level to where people are referring your business and service to others instead of you selling to them, the money begins to come in droves.
In order for your company to look attractive to a buyer, you need multiple
sources of income, a healthy customer base, and a solid management team in
I wrote a book titled “The 5 Fundamental Elements of Every Successful and Sellable Business.” It is available on Amazon in print and Kindle version.
(I’m humbled and super proud to say it made the Amazon Best Seller List the day it was released!)
Buyers are buying the future income stream of the business, so they look for a large customer base, brand awareness, systems in place and upside potential.
Buyers will readily buy a business that has management and employees in place because they don’t want to buy a job.
Selling a business is somewhat of a “Clandestine” operation and the fastest way to ruin a business is to let the world know the business is up for sale!
Employees will go elsewhere, vendors will become concerned about getting paid and about the new owner, and customers will miraculously vanish.
The only people who are happy to hear that you’re selling the business is the competition and you can bet your bottom dollar they will be shouting it from the rooftops for everyone to hear.
Selling businesses is very different than selling houses.
Many people think it’s similar, but they are two completely different animals.
The real estate model is the more people you tell, the more houses you sell. In the business brokerage industry, the more people you tell, the more businesses you kill.
As I mentioned earlier in this article – Selling a Business is somewhat of a “Clandestine” operation, and this is where a Professional Business Broker comes in.
Not all Business Brokers are Created Equal – because, as in all professions, there is competence and professionalism, and there is incompetence and unprofessionalism.
therefore, as you would do in any situation that you need to hire a professional, you need to do you homework, and you need to ask questions and qualify them.
In my business, I have a database of over 2,000 qualified business buyers and am associated with another 1,400 Professional Business Brokers who have their own list of buyers.
In every instance, buyers must sign a “Non-Disclosure” agreement before any information about the business is released.
A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA), is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties will not share or distribute and information shared.
Many business brokers have about the same rate of success as business owners do in selling their own companies. The key, to your success is finding a business broker with a proven track record.
Here are 9 questions you need to ask BEFORE you hire a Business Broker:
Ask yourself the following questions to determine if you should sell your
business and when should you sell:
If you answered “yes” to most of these questions, then your business is still in the positive phase and it is a GOOD time to sell, or at the very least, come up with an exit strategy.
You might be asking yourself, “What do you mean?
If I still love my business and it is doing well, then why in the world would I want to sell it now?
The answer is because this is the best time to do so.
Business buyers want to buy a business that is thriving not dying and the biggest The mistake sellers make is they wait too long before selling their business.
Here are some additional questions you should consider in order to determine if
your business is in a positive phase or a negative phase:
If you said “yes” to more than just a few of these questions, your business is in the negative phase and it’s time for you to get out before it’s too late.
Business Exit Timing is important for you to sell your business for Top Dollar.
Do you have a “Business Exit Timing” Strategy of Business Exit Strategy in place?
Paul Forsberg is a Business Growth Coach Who Specializes in Self Employed Business Professionals "Make The Phone Ring With Quality Leads, So They Can Get More Customers, & Make More Money." Author of the #1 Amazon Best Selling Business Book "The 5 Fundamental Elements of Every Successful Business .... Why Most Businesses Cannot Be Sold & What You Can Do About It." You can reach him by email at Paul@PBForsberg.com
Please log in again. The login page will open in a new window. After logging in you can close it and return to this page.