There are only so many hours in the day. As a result, many business owners feel that their time is more valuable spent on managing the day-to-day operations of their company rather than planning for an exit. What if the value generated from readying a business for sale is beneficial to the company’s operations and serves to increase its value, no matter what the future holds?
Adopting a ‘buyer’s perspective’ can give owners much needed insight into the financial and organizational health of their business. Don’t be afraid to perform your own internal due diligence. Reviewing company policies and procedures from a prospective buyer’s point of view gives business owners a better understanding of the quality of their operations. If any problems are identified that would trouble a prospective buyer, fixing these not only helps generate additional value at the time of sale, but helps the organization run much more smoothly in the meantime.
Another benefit to being prepared for sale is that even when an exit is unexpected, circumstances may arise where there is no other option available. The truth is that no one is able to predict the future. Therefore, when market conditions change, opportunity presents itself, early retirement is sought, or family emergency arises, having your business already prepared for sale enables a smoother transition and the ability to extract the maximum value, no matter when the exit occurs.
Readying a business for sale does not have to mean that an exit from the company is the owner’s intention. Managing a company as if a sale is imminent enables the business owner to be prepared to maximize value whenever the need arises, and increases organizational health in the meantime. Think of it in terms of renovating your home; if you remodel your kitchen with the intention of increasing the value of your home upon sale, even if you decide not to move right away you have a beautiful new kitchen to enjoy until the time comes. That’s the best of both worlds.