Taking the proper steps to plan a successful exit strategy can significantly improve the likelihood of a successful sale. No matter how secure you are in your business, no matter how satisfied, no matter how you expect to go on forever, you have to be constantly planning for the day you will no longer own your business.
You can’t wait until the last minute to put together a successful exit strategy. The day you open your business is the day you need to start planning your exit strategy. There are three stages to planning for your exit from the business:
- Long-Term Planning (greater than 3 years);
- Intermediate Planning (6 months to 3 years); and
- Short-Term Planning (less than 6 months)
Whichever stage you find yourself in, you can use these 4 steps to plan for a successful exit strategy:
1. Clean up the premises to increase your “curb appeal.”
According to an old saying, “You never get a second chance to make a first impression.” Buyers will form opinions about the viability of your business based on its appearance. Make sure that landscaping is neat and trimmed, parking lots are in good repair, the outside of your building has a fresh coat of paint, and the inside is clean and orderly.
2. Sell or replace obsolete equipment.
In addition to increasing efficiency and productivity, getting rid of old equipment will increase the attractiveness of your business. The last thing a new owner wants to do is spend money on new equipment after shelling out big bucks for your business.
3. Clean up receivables and inventory.
Having a lot of money out on the street or having warehouses full of product sends a negative message to potential buyers. Be aggressive in collecting what’s owed to you. Eliminate old inventory; buyers are not willing to pay for obsolete inventory anyway.
4. Trim your payroll.
No one wants to lay off good employees. But potential buyers want to know that you are operating with a lean, mean workforce. Review each position carefully to determine how much it contributes to the bottom line. If you can eliminate positions without hurting productivity, then do it.
Need a pro to help plan a successful exit strategy?
While the above 4 steps that can be taken now to plan for a successful exit strategy, a professional business broker can help. They can identify and help you tackle other steps based on the specific circumstances of your business.
You can also download our Selling A Business Checklist, which offers insight into how to get your business ready to sell:
If you need help putting together a strategic plan, please contact the Benjamin Ross Group at 215-357-9694 to speak with a business broker who can help you start the process.