When you start a new business, you can have a variety of exit strategies in mind. They can vary from leaving it to the next generation to going public. But one of the most common scenarios you can be planning for is to sell your business once you’ve built it up. Maybe you’re planning to sell when you’re ready to retire, maybe you know that you enjoy what you’re doing now but after a few years you expect you’ll be ready for a change. No matter the reasons, putting your business in a position that you can sell it easily simply makes sense.
Planning a Sale from Day One
Not all entrepreneurs think about their exit strategy when they’re starting a new business. After all, it makes more sense to think about a sale when you’ve actually got the company up and running. But the way you start your business can have a major impact on how you will be able to leave it. Something as simple as the business structure can slow down a sale, especially if there’s another party involved in the ownership (a partner or an investor). While thinking about a sale may not make you avoid partners, thinking ahead will allow you to set up a contract or an agreement that can minimize problems down the road.
Similarly, the processes and systems you put in place to operate your business can make a buyer more or less interested in taking over the management. The tools you use, in particular, are worth considering. For instance, you can put together a custom website for your business that requires a personal knowledge of HTML and more than a few hacks to work. Or you can make the whole thing easier to hand over to a successor whenever you choose to sell by using a well known content management system to create your site and make sure that everything about the site is by the book and easy to update.
Delegation is the Key
Ultimately, your ability to step back from the business and have it run itself will be one of the most important factors in the sale of your company. While you can sell a business that requires close supervision from the owner, buyers are likely to offer lower prices. That’s because it always takes a new owner some time to get up to speed — time that can translate to lost money if the business can’t hum along on its own. The more processes and systems you can put in place to make your business automatic, the easier it will be to sell.
As you plan your business, spend some time thinking about how vital you are to the process. If, for instance, you’re a consultant and the business is based on your abilities as a principal, you’re going to have to problems to overcome if you want to be able to sell your business eventually. That may mean hiring some staff who can handle the same projects you do or automating the process.
Image by Flickr user Ian Muttoo
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Tags: business planning, sale
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