Are you still in love with your business? No? You may need to look at your current business plan and how it is working for you. It may also be the perfect time to consider where you see yourself and your business moving forward. Is it time to sell, pass it on to the next generation or simply walk away?
Every small business owner hits a wall at some point. A time when you will question your motivations, your success and your drive to continue. You have a business plan to lay out how your day to day activities will be achieved and the goals you are striving for but do you have a plan in place for how you will leave your business?
Whether you want to sell up, get an investor in to free up some cash or pass your business on to the next generation, having a succession or exit plan in place is key.
Inviting in an Investor or Partner
For many small business owners, the biggest sources of stress are being overworked and under-funded. A simple solution to both of these issues is to look for a willing and capable partner to buy in. If you don't need an extra hand, an investor can offer the funds you need as well as a sounding board for decision making while you continue with the day to day running of the business, giving you more confidence in your path forward.
A partner can in buy-in, offering a much needed cash injection while also bringing much needed skills to complement your own. An ideal partner will share your vision for the business while bringing in a set of skills to complement your own. If you are an expert in designing and manufacturing your products but doing the books does your head in, bring in a partner who is a master with numbers so that together you can tackle the business challenges from different directions.
An investor is a great option for you if you if your biggest challenges are cashflow and strategy. By investing in your business and taking a small slice of the ownership, an investor becomes an integral part of your business success and is often an invaluable resource for you. The investor will have skills in business management, scaling and creating efficiencies. They can also often be a gateway to new networks with suppliers, stockists or customers.
Whether inviting in a partner or investor, either option will enable you to resolve some of your challenges and spread the workload so that you can focus on what you do best, reduce the stress and all without selling out completely.
Selling your business is a great way to exit your business and be rewarded for all of your hard work building it into a success over the years.
If your exit plan is for you to sell-out, you need to value your business so that you know exactly what to ask for as an indicative sales price. There are a number of business valuation techniques and not all will be the best for your industry or specific operation. Taking expert advice on the best method and processes can make it a painless process and may leave you happily surprised and will help to prevent you from selling yourself short.
Not all of the sales process is financial. You also need to look at how your business runs and how someone new can step into your shoes and start running it for themselves. Having a well structured guide to your business will add value in the sales process as it will give a potential buyer invaluable insight into your business and how they will be able to run it. It will also speed up the process of due diligence and help with a seamless transition out of your business.
MBP have the expertise to help you with the valuation of your business and to guide you through the financial expectations and the preparation of your business for sale.
Succession Planning for Success
Right from day one in your business, you need to have a plan for getting out, an exit or succession strategy. Above we have discussed a couple of the common ways to exit, either partially or completely. The third main option available to you is to put a succession plan in place.
A succession plan will lay out a path forward for you and your business and give you a structured path out of running your business.
Your succession plan can be to take on a partner who will eventually buy you out, sell up everything lock, stock and barrel or pass your business on to the next generation.
A large number of small businesses opt for the third option. After years of hard work, the business is passed on to the next generation to run as their own. This is essentially a hybrid option. The younger generation starts as a partner to learn the ropes, then begins to invest into the company more as they take on greater roles within the business before finally buying out the remainder of your stake in the business.
Whatever option you choose to pursue, ensure that you have a plan in place. Map out what you want to achieve, where you see yourself at retirement and how you will get there.
This advice is general in nature. Every situation is unique and requires tailored advice. MBP have the expertise to help you make informed decisions about your business plans, structures and exit startegies. We can assist with business valuations as well as setting policies and plans in place for smooth and seamless succession. Get in touch for a free consultation by emailing email@example.com or call us on (07) 378 6655.