- Category: Business Survival Toolkit
- Published on 01 May 2015
- Hits: 408
By: Olivier Barbeau – regular contributor
Part 1: Getting ready to sell
Do you want to get top dollar when you cash in your business chips? Then think ahead.
Are you older than 45? Will you be selling your business over the next ten years? If so, you are not alone. The majority of small-medium enterprise (SME) owners are from this age group and they are all thinking like you.
As many experts have pointed out, Australia will be swamped by SME sell-offs as baby boomers dispose of their businesses to spend more time with the grandkids, travel the world, or even take a part-time job. The theory goes that, with so many businesses flooding the market, it will be hard to sell at the price and time you want.
Fortunately, you can take steps now to make sure you are properly rewarded for your years of hard work and sacrifice when the ‘For Sale’ board finally goes up.
In a highly competitive marketplace, those who prosper at sale time are those who are prepared. This means investing time now in making your business attractive to buyers, knowing your worth, understanding the tax implications and becoming familiar with the sale process.
This six-part series is designed to help. First of all: is your business ready to sell?
Plan, plan, plan
An owner who takes a strategic approach to selling is better placed than one who doesn’t. All SME’s are affected by factors outside their control, such as economic fluctuations and social trends. A carefully thought-out plan protects the value of your business against the vagaries of external forces and many internal ones, particularly if you need to sell quickly.
The long-term financial consequences of a poor sale price could be significant for you and your family. Last year a St. George Bank study found that one in five SME owners expects to sell his/her business to fund full or partial retirement. A further 54% are doing no succession planning, with a sales their most likely exit strategies. Selling your business is one of the biggest financial decisions you will ever make. Yet in my experience, most people put more effort into maximising the value of their homes than they do into preparing their businesses for sale.
Getting your business ready will take up to five years of planning. That is a small investment of time to ensure you live your final 20 to 30 years in comfort.