The Business Edge Blog

October 19, 2012

For Sale: Your Business – but for how much? Part 1

In the beginning it was just you – and maybe a partner or two.  The business ran on blood, sweat and tears, with some heart and soul thrown in – and a chunk of your personal financial resources as well.

It’s no surprise that when the time comes to sell the business and retire, some owners just aren’t prepared.

The emotional investment is why it’s so difficult for most people to sell their business.  Sometimes a valuation produces a figure that is only a percentage of what the owner is expecting and needs for retirement.

How can you increase profitability and make it more desirable for a buyer, make it more transferable, and help convince the buyer that the business will remain intact post-transfer?  Front Range Business Inc, a Boulder-based brokerage firm that facilitates selling owner-operated businesses suggests engaging a business coach.

They cite many examples where a business coach has helped to double the value of a business over a twelve month period.  The work I do with my clients – either for their own growth or in preparation for sale – includes the same work Front Range Business Inc recommends; formalizing and documenting processes; creating employee, service and other procedure manuals; staff training; and most important of all, working ON the business, not FOR (or IN) the business.  Owners typically are so caught up in the day-to-day operations that they overlook the big picture.  Owners need to focus on marketing, training and where they want to take their business, then plan the route that will get their business to the final destination: a successful and profitable sale.  I suggest that my clients keep their exit plan in mind as they make decisions years prior to their planned retirement date.

When owners start thinking about an exit there are a number of big questions to consider.

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Stay tuned for Part 2 where I’ll cover these questions and other considerations!

Feel free to comment on your thoughts about preparing your business for sale by posting your thoughts below.

Until next time – Remember to mind your business!

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