Our experience has shown that the vast majority of business owners are too busy with the day to day operation to plan for the eventual sale of their business.
The first step in preparing for your eventual exit and sale of the business is to work yourself out of a job. This is best accomplished by ensuring that your staff can handle all of your daily activities when you are not on site. This is known as an absentee operation. It doesn’t mean the business will run on its own. It just means the business will continue with daily operations without you being present everyday.
The next step in preparing your business is to create a well documented operation manual or business plan. This document spells out the org structure of your business, the market you serve, growth plans and includes the latest financials for your business. Regular updates of your business cause you to think more about the long term and how you would transition the business to a buyer.
Finally, ensure you have the proper documentation for employee wages and operational expenses. It’s best to have a consistent approach to monitoring expenses which goes back for at least 3 years. Therefore, if you plan to sell or retire within the next few years start now to record all expenses and document personal expenses so that they can be easily separated from business expenses during the sales process. This will allow you to maximize the value of your business.