Get Ready to exit your business

Face it openly

It's my baby. Why would I walk away?

But I don’t want to sell

my company!

Whenever you talk to entrepreneurs about exit strategies, they almost

invariably protest

The only way

You may never want to exit your company, but making it ready to sell will guarantee a good result.

Top 5 for a healthy Business

• Invest in your web side

• Invest in your content

• Invest in marketing automation and CRM software

• Create a real-time dashboard of your sales pipeline

• Develop a formal sales process

Main Questions

• Are you ready to sell your business?

• Is your business ready to be sold?

These are not the same questions although the answers must be consistent.

Are you prepared to let go of your business - to get out now?

Physically

Logistically

Financially

Emotionally

Think about

Business Ready

• Do you have a history of consistent sales and profit growth?

• Do you have at least 2 years of clean financials?

• Do you have a foundation of robust systems, processes and structure and are they fully documented?

• Do you have projections showing increasing value for the buyer long after you exit? Do you have projections showing increasing value for the buyer long after you exit?

Is you business ready to be sold

Really Ready

• Are you ready to make the necessary changes to make the business “buyer attractive”?

• Do you know what makes your business “buyer attractive”?

• Do you know what makes your business successful in your market?

• Are all your stakeholders prepared for the transaction?

Many prepare themselves for their exit and forget to prepare the business

can make for a very tough transition for the business, clients, team, and suppliers.

Challenges are totally avoidable - prepare the business for the exit transaction while you - prepare yourself for your exit transition

Don’t forget

PLAN AND PREPARE – and DO IT NOW!

You need quickly decide on two things:

1. How much do you want to sell for?

2. When do you want to sell?

able to do what you want next in your life:

new businesstravel around

As soon as possible?But will you get the figure you are seeking?

To Maximize your exit strategy

• Quantify your business value

• Eliminate worthless inventory and debtors

• Tidy up financial records

Best to Maximize

• Audit your books

• Install and improve Systems

• Prepare your management team

Make it attractive

• Inventory

• Plant and equipment

• Business premises

sell all obsolete or slow moving stock items

look at your premises with the eyes of a potential buyer. Clean up, maintain, and paint the premises where necessary.

sell any redundant or obsolete plant and equipment, machinery, spare parts, and scrap that is no longer required.

More Attractive

• Employee

• Commercial premises leases

Ask your staff to take their leave and other entitlements.Retaining key employees after transfer to the new owner.

Review business premises leases and ensure the lease does not expire or require renegotiation during the time when you plan to sell the business.

Right Price?

• Valuing your business

• Return on investment (ROI)

• Asset value-going concern

ROI = Net Annual Profit x 100/priceor

Price = Net Annual Profit x 100/ROI

Right price - are you sure

• Market value

• Cost of creating the business from scratch

• Obtaining professional advice

- Get more qualified buyers

- Finer points

- Emotions : Having a professional working will eliminate the stress and emotion

Most importantthe sale

You need to decide whether to sell your business yourself or to engage a business broker to do it for you.

Put your business on the market

Get a business broker involved

Don't Forget

• Qualifying buyers

• Negotiation

• Finalizing the sale

Get a signed Confidentiality Agreement before supplying private financial records to any potential buyer

negotiation terms: what do you want?anticipate compromise: what will you compromise on?your walk away position: when will you stop negotiating and walk away?

to minimize the occurrence of any problems and to ensure the sale is valid involve a professional business broker

What about Franchise

too much pressure

too little free time

the desire to move on to something new

Before Making any rush decisions

... draw up a list of all the problems you are experiencing in the business

sit down with your franchisor and go over them one by one

... speak to other franchisees

First Steps

1. Review franchise agreement to be sure you are allowed to sell your business & transfer the agreement to a new owner

2. Consult with the franchisor beforehand

Company will likely want to approve the new owner

More Steps

Most franchisors have a first right of refusal

What to do?Consult franchisor: if it doesn’t wants to buy,

get proof of this waiver in writing

Be careful!

• read over the section in your franchise agreement on post-term covenants

• make sure you know the rights and duties you have

Be careful again

significant role in any business plan you may have down the road

recommended that you bring your business broker or lawyer in to help you

One Possibility

Inquire whether or not there are other franchisees in the system who may want to

take over your business.

This could prove to be the fastest way to an exit.

To Exit your business

BCI Business BrokersTony Arena (Managing Director)3/1 Alexander Street, Crows Nest, NSW, 2065Phone: +61 2 9439 3399Mobile: +61 411888148Email: tarena@bc.com.auwww.bc.com.au

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