Have you ever had your business valued? If not why not?
Getting a business broker in lets you plan for the time when you DO want to sell, it doesn’t need to only happen on the eve of your retirement. Getting ready to retire is often called ‘Succession Planning’.
Why did you get into business in the first place? Over 60% of SMEs started their own business with the main agenda being that they would grow the business to a point of sale and then retire.
So if you look back to why you started the business in the first place then it makes sense to spend some time on a regular basis to make sure that your plan will work.
So what makes a business easy to sell and enables the business owner to achieve the maximum amount for that business?
Yes you have to focus on your customers and employees to ensure that the day to day bills are paid BUT you also need to look at your financial and statistical reports to ensure that you are producing something that is attractive to a potential buyer. Some examples of things to look at:
1. Are all your eggs in one basket? To be a safe buy you need multiple customers and multiple suppliers?
2. Can you separate the Directors wages and super from other staff?
3. Have you setup softwares and processes that help with staff turnover?
4. Have you delegated / duplicated your skill set so that staff can take care of things whilst you are on long holidays?
5. Is your type of business up to date with changes in your industry?
6. Is your industry in a growth area? Do you need to diversify to ensure that your business stays in the attractive / on the way up types of businesses to purchase?
7. Look at your net profit before owners payments. Are they in line with your industry standards. Check here for some KPIs https://www.ato.gov.au/Business/Small-business-benchmarks/In-detail/Benchmarks-by-industry/
Getting your business ready for when you retire may also allow you to work less and enjoy your working life more. This type of forward planning can take 5-10 years to complete so why not start now on the road to your retirement!
Interested in this subject? If you answered YES then –
Talk to WiseClick about your data flows and setting up written business processes for each organisation role and reducing admin work.
Talk to your accountant about succession planning.
I hope you enjoy learning more about your business and planning for the ultimate goal of a profitable sale and/or a happy retirement.
Chat soon, Cheryl