Plan early how to cash in and sell your firm

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Last week I delivered a key note speech at Europe’s biggest business show at the ExCel in London about how to grow and sell a business.

It’s a hot topic, especially as the economy is picking up and business owners look to cash in on a period of stability following the General Election.

Those of you that tune in to hear my business tips and advice on The Jeremy Vine Show on BBC Radio 2 will know that I am forever advising Jeremy’s six million listeners that preparation and planning really is the key component part to running a successful business.

Almost from day one of launching your business you should be contemplating selling it in the future.

So, if you are a Yorkshire based business owner hoping one day to sell your company, the crucial advice I can offer you is to plan way in advance.

I developed my own company over a ten-year period and sold it for a seven figure sum.

Every organisation is different but there is one prevailing factor that will govern whether you will be able to sell your company in the future and that is “have you grown and developed your business to sell it?” If you haven’t it will be that much harder to find a buyer.

Essential elements in the exit process include ensuring that you have a profile in your sector, that you have achieved sustainable 25 per cent profits year on year, that you have identified the type of organisation that would purchase your company, that you have tracked previous M&A activity in your sector and that you have retained both employees and customers.

If you factor in these important themes in your business exit strategy you will have a decent chance of developing a dynamic company which will then be attractive to a prospective buyer.

Now this might sound slightly strange but a really excellent piece of guidance is to start at the end before you begin.

If you fail to contemplate what your business is going to resemble in a few year’s time you will potentially lose value when you endeavour to sell your company.

Don’t make the mistake of allocating all your time to the day to day management of your business. Instead try and consider what your business will look like in 2020 and try and imagine what your sector is going to be demanding and how you can exploit it.

Quite often acquisitive CEO’s want to buy into either a new sector or buy a service or product that they have failed to develop and which they recognise will add value to their own business.

Whilst on a daily basis you will be building your company around your customers never ever forget that there is an even bigger client out there, someone with a cheque with your name written on it with a seven or eight figure sum.

Continually concentrate on that ultimate customer, the one that is going to allow you to retire early and therefore exit your business with a large cheque in your personal bank account. To achieve this the criteria is to look after today’s clients as they will then provide you with that final wonderful customer.

Speak to your accountants about how to increase profits in your company and seek out people who have actually sold their companies and tap in to their knowledge and experience.

Nick Brown is the managing director of Corporate Exit and is The Jeremy Vine Show’s Business Expert on BBC Radio 2. You can follow Nick on Twitter @NickBrownExpert.

Take advice from sellers

You can’t beat real knowhow when preparing for a future sale of your company.

Whilst theory is valuable the best advice is always going to be from someone who has accomplished the actual dream of selling their business.

That is why, having sold my own business, I established Corporate Exit to help business owners sell their businesses by offering mentoring and creating personal action plans to attract the right buyer.

The tactical fact to communicate to all business owners is that selling your organisation doesn’t just occur by chance.

It takes endless planning, often 3-5 years.