If you own a business, then a good deal of your life is about mitigating risk. You have insurance policies to cover unforeseen events like fire and theft, but the insurance you really need isn’t a policy at all.
You need to be prepared to sell at any time, and by being prepared you ensure that you will be able to handle whatever major upheaval is forcing you to sell and the sale of your business simultaneously.
Most owners don’t plan for this eventuality, assuming instead that the timing of a sale will be on their own terms and will occur peacefully near retirement age. This isn’t always the case, so many owners are stuck trying to contend with a personal catastrophe and then also having to put together what’s needed for a successful sale – all why trying to keep the business doors open long enough to get it sold.
How do you avoid this high-stress nightmare scenario? Set yourself up with your own in-case-I-have-to-sell insurance by maintaining your business in a ready-to-sell state.
Some pointers on how to do this?
Keep your books in order.
If you are a business owner who keeps records by shoving stacks of receipts and daily report print-outs in a box under your desk – it’s time for an organizational change. You would need to have legible and well put together financial statements and business records (like P&L’s, copies of contracts and leases and the last handful of years of tax returns) to give to any potential buyer. Getting your books and records into a user-friendly format and then keeping them that way will save you the headaches of trying to find and assemble all of the documentation buyers will want when you have too much going on in other parts of your life.
Keep the business in good, clean shape.
First impressions are always a big deal, and many owners get a little lazy with the appearance of their business over time. You will always have tomorrow to repaint that wall or fix that leaky cooler, right? If you don’t want to drive buyers away in that oh-so-critical, need-to-sell time then you need to change the way you maintain the physical appearance of your business in the same way you maintain the books. Not only should you keep everything in good repair, you should also keep your business clean. One of the major complaints we get from buyers after a first visit is how dirty a business was. If you have a major issue that is compelling you to sell, you can’t afford to have buyers think your business is filthy – because if you haven’t even kept the place clean, what else have you let slide?
No one wants to be forced to sell their business, but situations frequently arise that require sellers to do just that. Set yourself up so that you could potentially sell at any time and you will help mitigate the stress of what would already be a very stressful situation. It’s the smartest insurance you can give yourself.
Are you a business owner who has never even thought about an exit strategy? Would you like to know how you can get your business in ready-to-sell shape? Ask us! Please feel free to leave a comment or question here, and we would be happy to help.
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907