Tip #121: How to Prepare to Transition Your Business to a New Owner

tip 121: Preparing to transition your business to a new ownerIn true entrepreneurial spirit, many business owners design their business with the intention of one day selling it.

Others don’t give the sales process much thought until later on. However, even if your company is successful now, you may want to take your career in a different direction down the road or retire one day. It’s a great feeling to see your hard work pay off with your business selling at a good price, but it takes strategy to achieve that goal.

One of the best ways to frame your thought process is to think from the new buyer’s perspective. Consider what will make the transition process easier on your acquirer. If you can simplify that transition, everything else will fall into line.

Here are 6 tips to simplify the process of transferring your business to a new owner:

  1. Keep your profits healthy & make sure your records are up-to-date. These records are like a report card for your business, so you want them to reflect good business health and be easily understood.
  2. Make sure those business financials match up with reality. Inaccuracies could lengthen the time it takes for your deal to go through (and you could lose the trust of the buyer).
  3. Ensure that all important documents are transferred. Leases and licenses, and supplier and customer contracts will need to be officially transferred to the new buyer.
  4. Confront any problems you’ve been sweeping under the rug. Any good buyer will dig out the skeletons in your closet, so it’s good to be prepared. You don’t want the sales process to take longer than it has to.
  5. Grow a team of skilled workers, and make sure they are able to keep the company running without you. Having a talented team makes the transition process much easier on the buyer.
  6. Make sure your business is up-to-date with the latest technologies and that you have systems based around those technologies.

 

If you need help preparing your business for sale, contact The Bridlebrook Group. Plus, read up on 7 Ways to Prepare Your Business for Sale.