As people who started businesses in their 30s and 40s move into their 50s & 60s in the next few years, we're going to see a glut of small businesses coming up for sale.
If you're one of them, this sale could be the most important transaction of your life. So let's make sure you get it right.
Know the valuation you need
A sale isn't 'done' until it's done, and they can break down at any time.
One of the main reasons for a deal falling apart is a difference in opinion about the valuation. Negotiations get emotional - after all, for the owner, "this is my baby!"
Greed kills deals. So know the valuation you NEED to achieve to be financially independent for the rest of your life.
To find out what valuation you need, use this tool: https://strategicmentors.co.uk/exit-calculator
Exit 1
There are two stages to the sale. The first is 'Exit 1' - removing yourself from the day-to-day operations as much as possible.
Why? Think from the buyer's perspective. If the business needs you, the buyer will want you to continue to be involved. That's sensible risk management on their part.
So, Exit 1 helps increase valuation, and shortens your personal timescale to becoming truly free.
Exit 2
We now move to the final phase: doing the deal.
I'll write more on the sale process in later articles here. And while there are complexities, at its heart treat it as a MARKETING exercise.
Source the right kind of buyer. Open the conversation. Solve the buyer's problem(s), and make the deal work for them.
Be clear on the difference between maximising the sale price, and being financially independent for life. Don't let greed or ego get in the way of doing a deal that will set you free.
After years of building your business, you have the opportunity to set up a free and secure future that can serve you, and your future generations.
Going straight to 'Exit 2' and aiming to sell without the previous two steps isn't a shortcut, it's skipping steps that costs you heavily.
The work done before the deal is where the real value is created. Make your decision to exit well before you 'need' to make the sale.