Last month we looked at some of the areas of your business that you can focus on in the months, or even years, prior to sale in order to potentially make your business a more attractive proposition to buyers. This month we are going to consider some of the reasons that might bring about a sale.
Before starting the sale process it is very important to understand what your objectives are. Until you understand your objectives you will not be able to effectively plan your exit from the business.
Typically, owners choose to sell their businesses for one of the following reasons:
Change in lifestyle
It is quite normal to reassess your life goals every so often, and it isn’t surprising that this may result in you wanting to do something different with your life. This might involve retirement, or just wanting to cash in on something that you have created. It may even be that your health is not quite what it was, and it simply does not allow you to continue running your business.
Entrepreneurs v managers
Many small businesses are started by entrepreneurs, sometimes completely by accident! At the time starting a business may have seemed like the most natural thing in the world. However as the business grows and matures it may be that entrepreneurs often feel stifled by managerial responsibilities such as finance, employment legislation, HR and QHSE.
Running a business may have stopped being fun and is increasingly taking time that you would rather spend elsewhere doing something different.
Many companies grow quickly and relatively easily in their early years. However there is often a point at which sales start to plateau, and it can become increasingly difficult and expensive to break through this ceiling. At this point in the lifecycle of a business a significant investment may often be required in order to reach the next level – for example to increase exports, develop new products or restructure the company. With this increased investment, the business lifecycle may repeat itself. However this is often a time when a business owner may reassess their investment in the business, both in terms of time and other resources. There may be a more profitable opportunity that has arisen, or the necessary investment resources may not be available.
Whatever the reasons for considering selling your business, it is important to understand them fully in order to plan and structure a sale in the most effective way for you.
What it means for the business
The reasons for selling your business may have an impact on structuring the most effective sale for you. Having the appropriate team around you including a finance director, on a full or part-time basis, can help you to both run your business and prepare for a potential sale.
Artemis Clarke helps business owners find finance directors that have the experience to support them. Not just to help them survive, but to help them thrive – whatever their business goals.
Speak to us about how the right financial help could make a difference to your business. Call 0117 244 1891 today.