If you're hoping to sell your business and retire within the next three years, your exit planning shouldn't begin three years from now.
It should begin today.
A three-year runway can give North Atlanta business owners time to identify weaknesses, improve financial performance and create a company that's easier for another owner to operate.
Here's what that process can look like.
Years 3–2: Determine Where You Stand
Start with a business valuation.
You need to understand the potential value of your company today before deciding what needs to change.
Suppose your retirement plan requires approximately $3 million from your business, but the current estimated market value is closer to $2 million.
You've identified a potential value gap.
Now you can spend the next several years working intentionally on factors that may improve the company's attractiveness and value.
Focus on areas such as profitability, recurring revenue, customer diversification, management and reducing owner dependence.
Years 2–1: Make the Business Transferable
The next phase should focus heavily on making the company easier for another owner to take over.
Ask yourself:
What happens if I don't come to work for 60 days?
If the company struggles without you, that's an issue worth addressing.
Document standard operating procedures. Develop managers. Delegate customer relationships. Strengthen employee retention. Organize contracts and improve financial reporting.
Your objective is to build a business that can function without your constant involvement.
Final 12 Months: Prepare for Market
As your target exit approaches, update the business valuation and organize the information buyers are likely to request.
That may include:
Tax returns
Profit-and-loss statements
Balance sheets
Equipment lists
Lease information
Employee information
Customer concentration data
Contracts and agreements
You can also begin developing the confidential marketing strategy and identifying potential buyer profiles.
Going to Market
When you're ready, your business can be confidentially introduced to prospective buyers.
Potential buyers can be screened, confidentiality agreements executed, offers evaluated and negotiations managed before proceeding into due diligence and closing.
How Early Should I Plan My Business Exit?
Starting several years before your desired sale can provide more time to address weaknesses and prepare the business for buyers. Waiting until you need to sell can limit your ability to make meaningful improvements.
Your retirement may be three years away, but your exit strategy can start today.
Business Brokers North Atlanta can help you understand your current business value, identify your goals and begin preparing for a confidential sale.
Start your exit plan with a confidential business valuation.