By Rich Gunn, CEPA and Jasmine Menard-Lenczewski, CEPA
Do you know when you will sell your business? Of course you do. You have a plan, and your plan is perfect. The only thing that can get in your way is…anything and everything in life.
As a business owner, you should always have your company ready to sell. That way if you do need to put your business on the market early, you won’t lose any of the value you have worked so hard to build up. BPM experts are here to help you avoid the worst while preparing you to achieve maximum value.
Become Your Company’s Chief Risk Officer
More than 55% of business owners sell their company long before they planned to – a phenomenon some refer to as the Fatal 55 – and it is often for everyday events that optimistic business owners don’t think about. Permanent disabilities, death, divorce and market competition are just some of the reasons that may force someone to sell their business prematurely. For the unprepared owners who find themselves unable to keep working after a life-changing event, selling a business quickly often results in a deeply discounted price.
Don’t let this happen to you. Start preparing your exit strategy plan by training others and delegating tasks while you begin taking on the role a Chief Risk Officer. Examine your business by seeking out risks, looking for where things can go awry and where the business can operate more efficiently. Lift your head out of running day-to-day operations, and start examining your business through a different lens.
Eliminate Business Risks, Once You Find Them
Once you identify any and all risks, eliminate them to elevate the value of your business. This will result in an increased sales price, no matter when your business goes on the market.
One of the most obvious, yet overlooked, risks is having a business that cannot run without you. If the business is overly dependent on you, it will immediately suffer a huge decline in value if you leave. Will someone still buy your business? Maybe, but they will likely pay an extremely low price for it. Some risks are not obvious. While insurance reviews are highly recommended for your business and personal financial wellbeing, keep in mind insurance cannot mitigate all risk that exist in your business.
Bring in Experts to Devise a Plan
If you prepare and identify what can go wrong, selling your business prematurely will not result in financial disaster for you and your loved ones. If you’re worried that you cannot see where all the risks are hiding, bring in Certified Exit Planning Advisors and implement a Value Acceleration Plan. Professionals can help you identify risks your company may face, so you can devise a bulletproof exit strategy plan. Experts can also detect how to enhance the value of your business, so whenever you sell your business – under any circumstances – you or your heirs can do so at the best price.
Rich Gunn and Jasmine Menard-Lenczewski are the leaders of BPM’s Value Acceleration Service Team, which helps with succession, transition and exit planning for business owners. Rich and Jasmine are both Certified Exit Planning Advisors and members of the Exit Planning Institute.
The Business Owners’ Special Series (BOSS):
The Business Owners’ Special Series (B.O.S.S.) is made up of several informational guides for business owners who are proactively seeking guidance from experts on how to implement value acceleration in their business. Be sure to keep reading, if you desire to develop your business to its maximum potential value and gain an understanding of how and why beginning the process sooner results in building greater value.