The Right Time to Position Your Business for a Sale
Experts will tell you it’s never too early to start positioning your business for a sale in order to obtain the highest price possible in the future.
Just as a successful business knows how to meet the needs of their customers, owners should be aware of what their future buyers will be looking for when acquiring a business.
“Begin With the End in Mind” – Stephen Covey, The 7 Habits of Highly Effective People
Who are likely to be the future buyers of your business, and what will be their specific buying criteria?
By structuring your business to meet their criteria you will be on track for a successful exit when the time is right.
♜ What is their gross revenue requirement?
♜ What is their EBITDA requirement?
♜ What is their management requirement?
♜ What are their operations requirements?
♜ What is the average multiple that determines price? For example, 3-6x EBITDA
Once you have a good idea of where you want your business to be when it’s time to sell, you need to analyze the current state of your business. What changes need to be made to your business, in order to meet your future buyers’ requirements?
And also keep in mind, the time to sell is when your business is doing well and trending up.
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