When deciding to decide ”for sale“Sign up in your business, how long it takes to hand everything to a new owner and start counting your profit? Don't be discouraged when I tell you it will take years – or should you.

Does not mean that the market is down or your business is not desirable. Getting the price you deserve requires years of important actions to increase the value of your company and offer something more attractive to potential buyers. It is not a single transaction but a perennial plan that is an integral phase of your business strategy.

Ideal starting point for Selling your business Is it really the day you start it. The next best time is today.

To sell your business for the maximum value, start with your planned sales date and work back. You may be surprised to see how little time is taken by the sale itself and how much it is dedicated to getting the company in shape. Let's turn the engineer that step by step.

Connected: Selling your business? Do these 6 things now.

Stages of sales process

From the day the business is sold, it will need about a year to get through the output process. You can have to work with a business broker and an investment banker to lead you while selling.

Assessing your business will depend on your latest history three to five years of financial history. You can't just base the value on a good year. Even if you sell an internal party as an employee or a family member, they will look at the average of three to five years.

If they have not produced a stellar performance for three to five years, you will want to get three or more years to improve your benefit.

You can still make optimizations along the way. For example, if we want to get the business in a net profit of $ 500,000 a year and we want to sell it four times that we can scrape so that we can say in the third year, it get $ 500,000 in net profit. Once we have finances showing $ 500,000 or after all for three years, this is when we would go to the market for sale.

This brings our timeframe to four years. You will probably need to prove in another year, before those three years of proven finance, to get the right to establish, to stabilize the business, to optimize the benefit, and get the processes in the country. Expanding timeframe up to five years, and if the buyer wants a five-year story, it will get it in seven years.

Foundation

Before you start building those three to five years of finance, do a business assessment to see what works, what is not and what are your goals:

• Improving the profit: Most business owners overestimate, even if they think they are conducting a lean operation. They are focused on income, no profit limits. I once worked with an accounting firm that makes accounting in the country, and for years, their prices did not change. The owner did not understand the impact she had on her top because she was not looking. Those profit limits will be very important in the sales process. If one looks at your numbers and sees you are not really uploading the real cost of business, it will reduce the value of the company.
• The inclusion of the owner: How involved are you in business and what leading roles do you play? If you are too involved, you need to withdraw so that the success of the business does not depend on you. One of the companies we work with is very dependent on the two business -owned partners. They have about a 10-year time limit because they are starting a new division that has a higher profit margin, but will also be less dependent on them so they can come out for a much higher rating.
• gROWTH: Once your borders are optimized and the business is working efficiently, focus on growing. Increase revenue by keeping higher profit margins.
• Exit strategy execution: Decide whether to sell a third party, transfer ownership to the family or employee or follow another output option. Build the right team, including a banker, lawyer and accountant, to support this phase.

All of these things are just as important, and they accumulate with one another – get them one by one and in the right order for the greatest benefit. If you try to grow business before choosing your borders, for example, you will grow your business to a lower margin.

Connected: I would like to know these things before I sold my company

An ongoing strategy

A period of exit is not static; It should be reviewed and adjusted every year. During your strategic year -end planning, estimate the following:

• your success plan: HAPPENSE What happens to business if something happens to you?
• Your main output option: Are you still planning to sell a third party, or have you moved your goals?
• Your spare output option: Do you have an emergency plan, such as employee sale or business distribution?

If you want to get out of your business what you have put in it, you should treat it as another phase of your business that goes on for a long run. Having a clear timeline ensures that you are always prepared, whether you are aiming for a specific sale date or you have to adapt due to unforeseen circumstances.