As an entrepreneur, you probably started a business to be your own boss, develop your personal wealth and, ideally, leave a legacy that will sustain current and future employees. Therefore, when it comes time to sell, you deserve to get the most value out of all the dedicated hard work you’ve put in. Here are five steps you can take right now to accomplish that goal and get the sale price you need to retire on or move to the next stage of your life.
Cultivate Recurring Revenue Sources
All successful businesses are driven by healthy, predictable, and sustainable sales. When you cultivate recurring revenue sources and make the most out of vendor and customer contracts, you’ll attract bigger offers because buyers feel confident that the money will continue to flow in while they acclimate themselves to the company.
Make Your Products or Services Stand Out
Companies that succeed tend to do so because they have differentiated themselves from the competition. The most effective way to do this is to offer quality products and services and use strategic marketing to make them stand out. It’s an approach that has been mastered to perfection by companies like Nike, Coca-Cola, and Apple, and if you adopt it successfully, you have an advantage that can translate into a premium sale price.
Increase Company Profitability
Profitability is not only key to a company’s survival; buyers will gladly pay more for a business with a proven history of making money and staying firmly in the black. If you can show that your profits have remained steady and even increased over time, your company’s marketability will go up tenfold. For an extra financial boost, look for ways to cut costs without impacting product / service quality or employee morale and keep an eye out for opportunities to increase efficiencies.
Create Transferable Routines and Processes
For many companies, their most valuable asset is their founder. Think Dave Thomas (Wendy’s) or Bill Gates (Microsoft). That’s a huge benefit while you’re at the helm, but prospective buyers will be understandably nervous about how well the enterprise will do once you’re gone. Stay charismatic, but at the same time develop seamless and efficient routines and processes that will let the company flourish without your direct input.
Empower Your Employees
Skilled and loyal employees represent both profits and stability for the company, so maintaining a high-quality team adds immense value, especially if everyone is committed to supporting the new owner after you leave. Incentives such as profit-based bonus plans and even equity ownership opportunities will motivate key personnel to remain aboard and keep the daily operations running smoothly after the sale.
Even if you‘re planning to sell your company in the future, the time to take action is now. Advance planning will give you time to conceive and implement the improvements that will drive up the value of the business and get you the sale price you want.
For assistance in putting together an exit strategy that can accomplish this goal, call Rosen Law today for a consultation. We will take the time to understand both your long-term and immediate goals, and apply our legal strategy and business acumen to maximize your success.