The concept of planning ahead is easier for some of us than others.   Some people like to plan and others are more “take it as it comes;” but both personality types can be successful in business.  The key to real success is knowing your strengths and weaknesses and learning how to adapt to them.  In my case, I’m more of a Type A, controlling and analytical person, who doesn’t “wing it” very often.  It’s not that I don’t take risks because I am an entrepreneur, who take risks on a daily basis, it’s just that I take a more analytical approach to my risks.  I try to evaluate and consider all options before I move forward, but once I accept the risk vs return, I’m all in.

Planning ahead relates to selling your business because part of your exit plan must include evaluating your strengths and weaknesses as well as risk vs return.  If you are less inclined to set goals and objectives then the selling process might be a little difficult. In that case, I would recommend taking your time… to think about what you want. It is crucial to have your end goal in sight before you decide to sell your business. Do you want to maximize the sale value thus selling it to a third party or would you rather get enough to retire and keep it in the family?  The options are endless and a sale can be set up any way as long as the buyer and seller are in agreement.

Here are some questions I would recommend that you consider before you put your business up for sale:

1) What will I do with my life after I sell the Company?

2) How much money do I need to have saved to live on after the close?

3) Do I have 10-15 hours a week available to dedicate to selling my business?

4) Do I have a minimum sale price I will sell the business at?

5) Do I know how much of my personal expenses I push through the Company and will have to pay after I close?

6) Am I willing to show all my financial information to potential buyers?

7) Am I willing to finance up to 50% of the sale for up to five years in order to make the sale happen?

 Is there any equipment or personal assets that are included in the Company that I want to keep after closing the sale?

9) Do I understand the transaction costs involved in selling a business?

10) Do I understand how much I will receive after taxes and transaction costs?

These are only a few questions that need to be thought about and considered long before you sell your business.  Each answer you come up with is interlinked to one other and will help define the success of a sale.  I have seen a number of sale transactions fall apart because clear goals and objectives were not established early in the planing.  Please, save your time, the buyer’s time, and your adviser’s time and plan ahead to the best of your ability.

This entry was posted on Wednesday, April 22nd, 2009 at 3:18 pm and is filed under Sell Your Business, Professional Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.