One often overlooked aspects of a small business is the creation of value for the business itself. As a small business owner you should strive to constantly create equity in your firm. This should start now, even if you are planning on selling for the foreseeable future.
All decisions should be centered on maximizing the value of your business. Your business is an investment and should be part of your retirement program when you sell it. Unfortunately most small business close their door when the owner retires.
You never know when you may want to sell your business. There are several things that could lead to such a decision:
- a health issue
- burn out
- someone approaches you to buy your firm
- someone leaves you a large sum of money
If you are always preparing your business to be sold the main benefit is stability for you and your employees. It help you maintain your business at a peak level if you are always prepared for someone to come and look at a possible purchase. By structuring you business this way, you may also be in a better position to look at potential acquisitions for yourself as a means to grow you own business.
“The value of your business is largely vested in your client relationships. You need to show strong client retention and satisfaction and lots of client referrals.” Another caveat, your clients should come to the firm, not just one person in the firm. Always I mentioned the following aspects of running a business, all of which must be included in the preparation for a future sale:
- good financial management
- client management process
- staff management process
- Good operations management
“Courage is doing what you’re afraid to do. There can be no courage unless you’re scared.”
Have a great day!
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