Last month we discussed what type of long-term exit planning can be done. This article will cover what type of exit planning can be done in the intermediate stage (six months to three years).
Clean up your books. Your accountant can make sure that your books reflect the true health of your business.
Invest in taxes. Pay your taxes – not only because it’s the right thing to do, but also as a way to invest in your business. By including all income in your tax return, you’ll boost the amount of money that you can expect to take in when you sell your business.
Computerize your operations. These days it is hard to believe that any well-run business is not computerized. If yours is, make sure that your hardware and software are up-to-date and functioning properly. If your business is not computerized, hire an Information Technology (IT) consultant who can help you set up a system designed to meet your business needs.
Address potential environmental issues. Potential buyers will want to know that your business is free from any environmental hazards. Identifying and remediating contamination such as oil spills, drums of hazardous materials, underground storage tanks, and asbestos can be time-consuming and expensive. It is better to meet the challenge head-on than to ignore it and have a potential deal blow up at the last minute. This is true even if you lease your premises rather than own the property.
Negotiate any contractual agreements. As with leases, some contractual agreements can be affected by a transfer of ownership. Have an attorney review all contracts and determine any potential sticking points so they can be resolved even before your business goes on the market.
If you need help putting together a strategic plan, please contact the Benjamin Ross Group to speak with a business broker who can help you start the process.