You may not anticipate a fire in your home, but you still plan how you and your family will get out if there is one. When you own a business, you may not, at first, intend to sell. But you will exit your business voluntary or not at some point in the future therefore; it is still important to have an exit strategy. In fact, forward- thinking entrepreneurs often plan their exit as they’re making their entrance. Grooming your business properly will help you exit in a way that is most advantageous to you, and to your business’s future. Here are three questions to ask yourself as you go through the process.
1. Have I built in enough time to groom without customers and employees recognizing those tactics?
If, all of a sudden, you are making a lot of substantive changes to your business, it is going to cause customers and employees to wonder what you’re up to or abandon ship altogether. It creates a sense of unease and even distrust because something is going to happen, and that may not be good for them. Ideally, you begin grooming your business, gradually making the changes and improvements you need to, without making your intentions obvious.
Building in sufficient time for grooming ensures that customers and employees feel a sense of continuity. This sense of continuity, then, can transition to new ownership.
2. Will there be a return on grooming investments?
Sometimes, in an effort to get the best price for their homes, owners will do an expensive remodel of their kitchen. Or they’ll extend their master suite. But home – and business – buyers in this economy are looking for deals, not frills. If you are going to make any changes or pursue any initiatives, you have to consider whether it will pay you back. Is this action justified?
3. Will this have an impact on my ability to continue day-to-day functions?
You can’t sell a business that doesn’t exist; in other words, you have a company to run and grooming cannot interfere with daily operations. Pulling too many resources away from the daily operation of a business for the purposes can be dangerous and can cause more damage than good.
Preparing a business for sale obviously impacts the longer-term plans and projects, but detracting from your ability to complete normal, day-to-day functions will only have a negative effect when trying to find a suitable buyer.
Here’s a fourth question you should consider: how do I start the process so I can maintain business as usual, or better than usual, but also start making the company more attractive to buyers? A relay runner starts to change his gait and stance before he passes the baton; how should your business be positioned to do the same?