How to exit a business
Essential Selling Tips
Strong Financial Prospects
Not only your business needs to provide positive income but it also should warrant a level of confidence in future earnings.
Independent Business Model
Understand that the business needs to continue to operate without you. Make sure your business is transferrable.
A Marketable Brand
A strong brand helps buyers and customers build trust. Get more positive customer and employee reviews to facilitate the transaction process.
Clean Financial Records
Your company’s financials record and bookkeeping process must be understandable and reasonable. Preferably you should have 2-3 years of clean financial records before your exit.
A Verifiable Valuation
A verifiable valuation is prepared by a qualified person. Your asking price must be reasonable and fair using industry valuation benchmarks as well as income and asset valuation methods.
Having prominent and accurate marketing channels is imperative for a successful exit. Also make sure your business is on the market for a reasonable period. Data has shown a typical exit would take at least 6 months.
Commercial goodwill is the value gap between your fair value and your asset value. The value that is generated by recognizable product brand, positive features of your premise, contractual and other legal rights etc.
Strong P2P, R2R, P2P
Make sure your business has a solid financial process and system in place. How efficient are you in providing quotes, ordering inventory and paying the vendors? Do you have a standard procedure to record and receive payments?
Qualified Professional Help
Make sure your financials are up to date. Do you have well-documented operating and financial data? Are your external financial statements well prepared by qualified professionals? Do you need a M&A advior to help you source and qualified buyer leads?