If you know that you are going to want to sell your business you need to start having that conversation with your business advisor and/or accountant at least 2-4 years before you want to sell.
As it takes on average between 6-12 months to actually sell a business, this allows you plenty of time to make sure you get the best possible payout.
You need to develop a plan to add value to your company, so what kind of things will make up this plan?
Things to consider when setting up a Business Exit Strategy
Obviously part of any due diligence that a prospective buyer will undertake will require you to show them your financials. Keeping your records current is vital to make a good impression.
Work on building a strong balance sheet, positive cashflow and also make sure that you have positive profit forecasts.
Reducing your personal drawings (if you’re able to) will also help to keep the profits in the business.
If you have staff it’s very important to review their contracts.
You will also want to review your lease terms as well.
If you carry stock then you will need to keep good track of it and make sure you’re not over-stocked.
You also need to review what plant equipment the business owns and make sure it’s service records are up to date.
Obviously there are other things to consider including succession planning to ensure that things will run smoothly when the company transfers ownership. As with all of your taxation and business planning we can help you to come up with an exit plan that fits your business. Phone us or email us to make an appointment with one of our experienced accountants.