Deals Are Still Happening: How to Maximize Value For a Successful Exit
There are endless reasons why any business owner wants to sell their business. Maybe the industry is experiencing a boom, and there is an opportunity to sell for a considerable profit. Or perhaps they feel their business has had a good run and are ready to pass the torch in exchange for a comfortable retirement. Whatever the reason, there is always the chance that selling your business can yield a significant profit and a successful exit—if you know what to look for.
Set yourself up for success
Too often, business owners are forced to sell below their desired price because they are selling last minute or they haven’t thought through what the sale will entail. Planning for the eventual sale of the business can have a significant impact on the results. Business owners should take the time to sit down and figure out what a fair price would look like and why. Setting firm goals guarantees that when the market is ripe for a deal, it’ll be easier to move forward with a sale that you’re comfortable with and that profits can be applied with original plans in mind.
Anticipate the seller’s earnings before interest, taxes, depreciation, and amortization (EBITDA)
For the most accurate picture of a business’s standing, part of any plan to maximize value should include calculating the EBITDA. The EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a useful metric for assessing a business’s profitability and ability to generate cash flow for its owners. Having an accurate EBITDA will give you a firmer idea of the business’s value, leading you to be better equipped for the sale process. If it seems too daunting to calculate alone, bringing in a professional can help provide the most accurate estimate.
Create your own competitive offers
It’s rare for a business dealing with one buyer to get the best deal. Don’t be afraid to stir up competitors to create competition and, hopefully, a better offer. Present your business to other potential buyers for a better variety of offers. That way, when it’s time to sell, the business can be presented to the open market rather than one by one. This creates an environment where potential buyers can compete with each other openly and put out better offers to win your business.
Don’t lose sight of the business
Sometimes when businesses are built with the sole intention of selling, business owners can lose sight of providing quality services or products. Even though planning is a key part of getting a good deal, don’t let your mentality affect your final product. After all, if the business isn’t providing anything worth selling, it won’t be worth buying.
Get ready to sell and work with professionals to ensure the best value possible. Please contact us for a confidential discussion of your specific situation. We have experience helping business owners across various industries to sell their businesses, as well as relationships with buyers interested in new opportunities.