inside FEATURES
BUSINESS SKILLS
How to prepare for the
ultimate sale
SIMON NORTON, (pictured) of The Exit Planning Company, offers his top tips on the skills you need to sucessfully sell a business.
a privately owned business. So how can you prepare and develop the skills you need? Here’s a rundown of the process in seven steps.
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Build an exit strategy It’s always important to have well-defined personal and business goals, both in the short term and the long term. To serve practical use, these goals need to be measurable over a given time period. When selling a privately owned business, a good exit
plan ideally needs to start two to three years before the sale. It should contain your planning for both personal and financial goals, including tax and estate planning. In order to deliver on both your personal and financial goals, it’s important to develop a wealth management plan before the sale of the company. As a business owner who has considerable capital tied up in a company, you need to take this into account. When building your exit strategy, you will also need
to decide how involved you want to be during and after the exit. Do you want to sell completely, or stay on for a defined period as a paid consultant? Or do you want to become a chairperson with a continued stake in the business? As with all business goals, a clear and concise plan from the outset is essential.
Value the business The next step is to determine the market value of your business. Once you know the value of your business, you can
decide whether it fulfils the financial commitments of your exit plan—for example, will you be able to fund your next project or retirement plans? Knowing the value of your business gives you
options, by giving you a quantitative sense of what you will be able to achieve.
24 insight SEPTEMBER/OCTOBER 2016
elling a business is typically a once in a lifetime event. As such, most business owners aren’t aware of the skills required to successfully sell
Define your legacy You should also consider, after many years of hard work building a successful business, what kind of legacy you wish to leave behind for your family and staff. How will you split the proceeds of the sale amongst your loved ones or the people who helped your business to grow? Alternatively, do you want any of the proceeds to go
towards a charity or a future project? Which charities or projects would be most in line with your personal philosophy or that of the business?
‘It’s always important to have well-defined personal and business goals’
Implement a succession plan Once you have sold, do you have a natural replacement to head the business? This will relate to the nature of your exit plan and how involved you want to be, to ensure that you are leaving the business in trusted hands. If you don’t have an immediate candidate in mind,
you will want to ensure that making this decision is a part of your strategy.
Review your options for sale Consider all of your options and determine which will deliver your personal and business goals. You may wish to transfer ownership to a family member, sell to other shareholders within the business (including a number of family members), sell to business employees, or sell to a third party. One option is a management buyout, which is a great
way to leave a legacy and reward your management team by allowing them to acquire all or some portion of the business. You could also refinance the business, go public, or liquidate the business.
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