A Good Exit Strategy is Worth a Fortune
Selling your business can be an organized process where each step maximizes profit and your advance preparation expedites the sale, or it can be a dismal failure full of gut wrenching interactions and tremendous amounts of your money left on the table at the close.
Fortunately the choice is yours, and VR Mergers & Acquisitions in Atlanta can assist.
A good Exit Strategy starts with simple awareness of the process of selling and can be implemented in advance in your day to day activities with little additional effort.
Thinking of the sale of your business in health terms, consider the sale with no preparation as last minute surgery with no anesthesia, and a properly done Exit Strategy as preventative medicine that will keep you out of the pain and cost of surgery.
Your foundation of your exit strategy is realizing that one day you will sell your business.
There are many reasons why a businessowner may opt to sell their business. Anything from burnout and boredom to divorce or medical issues can cause a business to be put up for sale. Once you find a business broker or middle market advisor in Atlanta, you can begin the process of determining if now is the right time for you to sell.
Simply stated, you should be thinking about, and planning for the eventual sale of your business when it is first formed. Creating a written exit strategy will help ensure that you achieve the best sale price while at the same time providing peace of mind. If you ever need to sell suddenly, being prepared will be beneficial.
Key steps to an Exit Strategy are as follows
- SET A TIMELINE. It is important to establish a timeline so that you can prepare in advance to maximize your sales price. It can take in excess of six months from the time of listing a business to actually get it sold. And there are a number of things as mentioned below that you will need to do in advance of “going to market”. When is the best time to sell? When you have growing revenues and peak profit performance, yet untapped growth potential is still evident.
- EDUCATE YOURSELF ON BUSINESS VALUATION TRENDS. Business owners often mistakenly think their business is worth a certain value without validating those thoughts. Business Brokers and Certified Business Appraisers can assist you in determining a realistic value for your business, which can be extremely helpful in your retirement planning.
- FOCUS ON KEY BUSINESS FUNDAMENTALS. Build a diversified customer base, build a strong management team, and continue to invest in technology, equipment, and the appearance of your business. All of these key ingredients will add value to your business beyond the “numbers”.
- NUMBERS ARE IMPORTANT. Make sure that a year or two ahead of selling your business that you focus on your Financial Statements. Regardless of how large or small your business is, “clean” financial statements are critical to the sales process and can more than offset the cost of proper accounting methods that one may normally try to avoid during the normal course of business. View your Exit Strategy from the viewpoint of a buyer. What would you be looking at if you were to buy your business? It is vital that your recasted or normalized P&L’s match your balance sheets and tax returns. After all, how much confidence would you have if you spotted significant discrepancies in any financial documents during due diligence?
- INVEST THE TIME TO UNDERSTAND ALL POSSIBLE TAX RAMIFICATIONS. During this process, you will be thinking about how much is my business is worth. However, it is essential that you also plan your exit optimally and make sure your financial statements are well-organized, and your profits are at their highest possible levels. One of the most important steps you can take is to understand, with great clarity, how much you will receive once you sell a business in Atlanta. Taxes are always a factor, whether you are in Fulton, DeKalb, Gwinnett or Cobb County or one of our other counties in this area.The sooner you begin working with a tax professional to determine how the income from your sale will be taxed, the better. Most importantly, be sure to look at how to minimize every possible tax. You’ll want to inquire about income deferral options, corporate entity structures, and more.
Once the decision to sell is made, the contacting of a business broker to discuss the market conditions and the various options you have to sell your business is imperative.
Most businesses are sold to other individuals through a broker who facilitates the transaction, working in your best interest.
Buyers can be entrepreneurs that have the same zeal you had when you started your business or industry players that will purchase your business to expand or enhance theirs.
A qualified business broker can be instrumental in helping you compose a good Exit Strategy that encompasses the sale scenario viewed from every angle.
It is our job to orchestrate this process and help you achieve your goal.
When the time is right for you to start, we’ll be there to help. Please contact us with any questions and or need of assistance.