By Adrian Spitters and Win Wachsmann. You’ve been running your business for some time now. Through the lows and the highs.
Remember burning the midnight oil as you struggled with all the “unnecessary” government paperwork? And lying awake for nights wondering if you would be able to pay all those bills?
And now the questions are surfacing.
From you. Is it time to retire? Can I use the business to fund my retirement? Who will buy it? Staff? Strangers? Your children?
And the questions from your spouse. When will you stop? When can we enjoy our success? You promised to go on an extended holiday. If not now, when?
Selling a profitable business requires determination and preparation. A time will come as you work your way through the preparation phase that you will be tempted to just abandon the process.
Planning and preparation may require some of the most concentrated time and energy you have spent in some time.
What are some of the pitfalls to avoid as you move along the decision-making road?
The business-for-sale marketplace has rules and requirements that may be very annoying. Be aware of the following pitfalls.
1. Financial Skeletons
Pitfall Number One is that you haven’t gotten rid of all your financial skeletons.
Clean up the expense side of your income statement. Because you have a company credit card, some of those expenses on the monthly bill may not all be strictly business expenses. Now is the time to clean them up. Get rid of all non-business expenses. Get rid of all unnecessary expenses. Does the company really need a boat?
Clean up the balance sheet and get rid of excess inventory and obsolete equipment. Buyers want to see a clean balance sheet.
2. Lack of Growth
Pitfall Number Two is that you really haven’t been growing your business.
Admit it! You’ve been coasting. You haven’t explored new markets in some time. You haven’t adopted a new marketing initiative for some time. You haven’t even explored how social media and the Internet could help you expand your business.
3. Working in the business rather than on the business.
One of the first questions buyers (and spouses) will ask is how much time do you spend on the business? How much time do you need to spend? Have you removed some of the bottlenecks in your business? What efficiencies can your staff implement?
4 Doing it Yourself
Pitfall number 4 is doing everything yourself? It’s OK to delegate. It’s even OK to let bad things happen. The world will not end if someone screws up. How many times have you screwed up? Suck it up and let others screw up.
5. Not Using Wise Counselors
Selling a business is a Herculean task with accounting, tax and inheritance implications.
News flash. Your accountant does not have all the answers. Neither does your lawyer.
Now is the time to find some additional trusted advisors.
You’ll needed to assess if your business is even sellable.
You’ll need to find a business valuator to tell you what it’s worth and how to improve it’s value.
And you’ll need a wealth advisor with a team of experts. He’ll position you and your business in the best possible way to minimize taxes, optimize your revenue and put your money to work so that your future is bright and cheery.
Then you can ride into the sunset… or lie on the beaches of the world… or finally research the history of the Knights Templar in France.
Your days will be full and now they will be stress-free.
Adrian Spitters, FSCI, CFP, FMA
As a Certified Financial Planner (CFP), Adrian Spitters offers financial advice that focuses on investments, retirement, business succession, estate and tax planning in cooperation with his clients own legal and accounting professionals.
He can be found at www.theretiringboomer.ca
Win Wachsmann has been helping businesses improve their marketing and helping them get ready to sell their business. He doubles as an author, journalist, syndicated columnist, filmmaker and businessman who makes his home in the Fraser Valley of British Columbia. His articles and columns can be found in some of the finest offline and online magazines, journals and media properties.
He can be reached at firstname.lastname@example.org.