10 steps to maximise the value and saleability of your business
Over the course of a 10-blog series, we will highlight the key steps business owners should take in order to maximise the value and saleability of their business. Industry specialist and founder of ‘Prepare to Sell’, Richard Wright, advises 10 key steps.
Today, we will look at Step 1 – Removing owner dependence
The valuation of your business will be determined by what remains post sale. The ideal solution for business owners looking to exit is to transfer skills and expertise to the management team. By allowing the management team to deal with day-to-day operations, under your guidance, they will become accustomed to how the different functions of the business operate, resulting, hopefully, in smooth transition when you do finally exit.
Consideration must also be given to customers and how to ensure continuity after the exit of a business owner. To this end, it is important that customer loyalty increasingly remains associated with the company as a whole, and not with you – the individual.
Having a capable and well-trained management team in place will enable the business to operate without you. If you are not doing this already, it is important to implement small steps until everyone, including you, is confident with this process. Remember, having the right management and financial information systems in place does not mean a loss of control.
Passing decision-making responsibilities can represent a significant cultural change for most owner-managed business. It’s no quick-fix and often needs guidance to make it work; however, it is key to growth, whether you are selling your business or not.
By passing on the day-to-day responsibilities to, you can concentrate on the strategic direction of the business, and often find a better work/ life balance.
Next time, we will discuss the importance and relevance of demonstrating a track record of growing sales, profits and cash with good projections.