EXIT STATEGY
Planning the sale of your business should take place long before the time comes to actually sell the business. Ideally, even before you start or buy a business, you should have a goal and concept of what you will do when you want to move on. The goal should always be to maximize the value of the business. Many business owners only visualize that their children will someday take it over. Unfortunately, most children don't want the business and the failure rate for second generation business is almost as high as new businesses. So, even if it does take place, you should operate the business with the intention of selling it for the maximum value. I generally like to talk to business owners a year or two before they actually want to sell. It is important to have records in order and "honest" financial statements. The old saying, "you can pay me now or you can pay me later." applies to business sales. If you have been making income "off the books", that will not be considered by a buyer in determining value, because if it is being financed banks and other involved parties such as SBA or INS will not include it in their analysis. Several months before your sale, you should start disposing of clutter. Unnecessary files and inoperable equipment should be gone before any buyer crosses your doorway. You should also take a look at your personal situation and what your needs will be after the sale of your business. Chances are you can maximize the value of your business by offering financing, and with today's market it may be the only way you will sell at all. Generally, it is well worth talking to your accountant and a broker about these issues on a regular basis throughout the time you are operating your business.
Thursday, August 27, 2009
Keys to Success in Business- #7
Keys To Success in Business #7
Outsource jobs others can do better- printing, payroll services, information technology. It is often said that the little things get in the way of big things. This can be very true in operating a business. You need to remember the real purpose of your business and concentrate on that. If designing menus or brochures takes time from business then it costs more than it saves. If you spend hours of your family time preparing payroll, you must be aware of the true cost of that. Spending several days in early April preparing tax returns can damage your business. You need to concentrate on the business and have things that can be done by others more efficiently and cost effective done by those that do it best. For example, a restaurant owner would need to meet with the vegetable vendor to make his selection rather than letting them just leave the order, because successful restaurateurs know that is when you get the vegetables that were rejected by the restaurant down the street. Plan your time to be the most efficient
Outsource jobs others can do better- printing, payroll services, information technology. It is often said that the little things get in the way of big things. This can be very true in operating a business. You need to remember the real purpose of your business and concentrate on that. If designing menus or brochures takes time from business then it costs more than it saves. If you spend hours of your family time preparing payroll, you must be aware of the true cost of that. Spending several days in early April preparing tax returns can damage your business. You need to concentrate on the business and have things that can be done by others more efficiently and cost effective done by those that do it best. For example, a restaurant owner would need to meet with the vegetable vendor to make his selection rather than letting them just leave the order, because successful restaurateurs know that is when you get the vegetables that were rejected by the restaurant down the street. Plan your time to be the most efficient
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