If you are a business owner with a year or two (ideally more than that) years up your sleeve ahead of sale, you should be doing some preparation.
Most people only ever go through one or two exits in their life, and its worth doing it right, since it’s usually a fairly major transaction.
Here are 20 questions to ask yourself ahead of sale:
Have you put together a “life after business“ plan on paper?
Have you started the process early enough so that, worse case scenario, you can have multiple attempts of necessary?
Have you selected appropriate representation to help (business broker / M&A intermediary)?
Can you demonstrate on paper that the business has sound growth prospects?
Can you offer your buyer well-researched data on your customers buying habits in the past and into the future?
Have you made suitable arrangements to ensure key customers won’t leave as soon as you do?
Have you undergone a formal business risk identification and mitigation process to increase the likelihood of a sale?
Have you discussed alternatives to selling with an exit specialist (e.g. Certified Exit Planning Adviser)?
Do you have a backup strategy that doesn’t involve selling the business?
Have you involved a financial planner or an accountant to help minimise the Capital Gains Tax on sale and other important tax matters?
Do you have a lawyer experienced in business sales who offers fixed price services?
Do you want to sell the shares or the assets of your company and are you aware of the tax implications for both?
Do you have 4-6 sale targets in mind you could partner with through Joint Ventures as interim steps toward sale or merger?
Have you prepare a plain English transition document for a purchaser to follow in case you get sick or hurt?
Have you made suitable arrangements to ensure key staff won’t leave as soon as you do?
Do you have sufficient managerial “bench strength” I.e. can the business operate effectively without you?
Will the buyer be expose to onerous leasehold restrictions.
Can you describe confidently what price and terms you are willing to accept, and what you would reject?
Have you priced your business 1-5X of Free Cash Flows and how does your price compare with others in the industry?
Have you taken advantage of free advice from your states local business chamber?
If your answers to the above give you concern you might be under prepared, I invite you to set up a complimentary meeting with me by following the the link at the the top of the page.