Most business owners do not realize they own either a high-paying JOB, a lifestyle business, or one that is run so well, that it can sell for a premium in the marketplace. Can you vacation for a couple of weeks and leave your cell phone at home? When you come back to the office will it be the same or better than when you left? If the answer is NO, then you have a high-paying job. A lifestyle business is where you are making the money you need to pay your bills, enjoy nice vacations, and own some toys. A business that is highly marketable and sought after is one that does not need to sell.
Another question you need to ask yourself is if you are taking too much profit out of the business and not reinvesting it for growth – including maintaining your management staff. Ask yourself, if you were in the market for an acquisition, would you buy your business if the name and certain circumstances were changed? If the answer is no, why would you think someone would be anxious to buy your business and pay top dollar? Short answer – they won’t!
Lynn Spencer here with Killingsworth Spencer CPAs. We have a team of professionals to help you realize your FULL potential from your enterprise while you own and operate now and how to get it ready to sell to family, management, or a full or partial third-party exit.
An Exit from your business can and does take several forms. No two exits are the same. You should learn and understand how each exit process works to determine the best course of action for you and your family. My first piece of advice is for you to always operate your enterprise as if it is always ready to sell when the timing is right – for you. SELLER TIP! – sloppy books spell disaster when Buyers are looking at any business opportunity. This is the only way for you to truly understand how much you are earning at the end of the day. Know your industry KPIs! – (more on this topic later) and run some financial models.
If you would like to begin a confidential dialogue with Killingsworth Spencer CPAs, please feel free to send an email to me at firstname.lastname@example.org or call me at 770-552-8286.
Make it a Great Week,
Remember, you may only get one chance to EXIT your business on your terms. Learn the rules so you don’t get burned!