If you ask most small business owners, they will likely tell you that they have an exit strategy for their eventual departure as leader of their business. For many, this exit strategy may involve passing the family business down to the next generation, or perhaps they intend to sell their business when the time comes. What many small business owners don’t do is keep their business ready to sell.

Why would any business owner concern themselves with an eventuality that seems so far away?

The reason is life can be very unpredictable, and the time to sell might be far sooner than you think it will be. Having your business in ready-to-sell shape will avoid the panic we often see when an owner is suddenly forced to sell.

What are the reasons that an owner would be forced to sell?

The most common we see are family and personal issues. Divorce, a sudden illness for the owner or for a close member of the family, and a need to relocate for another member of the family are reasons that typically occur suddenly and can’t be pushed to the backburner in order to keep the business running. If you are a seller trying to contend with such personal upheaval, it will be difficult to focus on the pre-sale issues that you would have to contend with if your business is no where near ready for the market.

How can I get my business in ready-to-sell shape?

First and foremost, get your financial records in order. If you are like many small business owners, you may have a filing and record keeping system that makes sense to you, but that no other person could possibly decipher. You would need to have at least the past three years of tax returns and current P&L statements put together, but in reality all of your records need to be kept as orderly as you can so that a business broker and buyers can make heads or tails of your business when it hits the market.

Secondly, don’t let the aesthetic appearance of your business go, or let your business fall into a state of disrepair. Any buyer that comes in the door will be greatly affected by a first impression, so keep your business clean and in good shape.

While no one hopes that they will suddenly need to sell their business, it is a circumstance that happens all the time. By keeping your business in a ready-to-go state, you will be better prepared should the unexpected happen.

Are you a business owner who has questions about how to keep your business in ready-to-sell shape? Do you want to know what buyers look for in your industry? Please feel free to leave us a comment or question here and we will be happy to help you get your questions answered.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com