Did you get into business and don’t know how to get out?
Its sounds like a simple question, but I’m constantly surprised by the response when I ask business owners “why are you in business and what is your end goal”?
The answers are varied, but it’s obvious that many people are in business without a clear understanding of the end game.
So let’s make sure you follow my important phil-osophy and don't find yourself" in business not knowing how to get out"!
In business there are two types of profit, operating profit and a profit on the sale of your business-the ultimate prize and reward for being in business. As an extension of my phil-osophy, the end game of business should be to make a significant profit on the sale of your business.
Unfortunately statistics clearly indicate that most businesses don't sell or can’t make a reasonable profit on the sale. So if this is your goal and you don't achieve this, we need to ask ourselves why?
The answer is very simple- the business was not ready to sell when put on the market.
The secret is that an owner needs to understand that the end game is to make a significant profit on sale and that they need to continually work on making their business sale ready, as a sale ready business is worth a lot more than one that is not.
So if the secret is to make a business sale ready what does a sale ready business look like?
The definition of a sale ready business is “a business where the value placed on it by prospective purchaser meets or exceeds the value placed on it by the vendor”. To maximize the value of your business, and improve profit, you have to build your business to what a prospective purchaser might be looking for.
So what does a prospective purchaser look for?
The following are the key attributes a sale ready business will have;
- A clearly defined business purpose
- A history of profit growth
- An industry leader in terms of profitability
- Highly systemized i.e. processes and procedures for key functional areas
- Under Management, not owner controlled
- A Business Plan with clearly identified growth drivers
The process of making your business sale ready is in effect your business journey, from start to finish, and not something that just should be considered when you are ready to sell.
And remember “a good business ready to sell is also a good business to keep”!
If you would like to know how to make your business sale ready please contact;
Philip Coombs “The Profit Coach”
Simply Business Australia
firstname.lastname@example.org / www.sbasuccess.com.au