4 Expert Insights

You may earnestly consider producing a “Process Document” (P.D.) to catalogue all of the policies, procedures, processes it takes to run your operation. This P.D. covers the who, what, where, when, when, and how of  every function of your business. Contents can be in written form, or electronic form which can include video, audio (MP3) and photographs if applicable.

This P.D. will create clarity of all functions, demystifying the operational portion of your business while simultaneously providing a smooth transition for your new owner(s).

The P.D. will also allow for greater autonomy for you or any principal of your company post sale. For more information on how to produce a P.D. I am available for a one hour complimentary session.

In addition to what Stew said, you need to have a strategic plan as well as deployed action plan so you can show the potential buyer all the steps you have been taking to make your business successful. You also need to asses the value of your business and determine what do you want to get from the potential buyer to who you are selling the business. This will I am sure end up in negotiations, but you should be the first one to put a $ sign on your business

Terrific answers.

Steven makes a good point in that increasing value can take time. I would suggest you approach this another way and ask "What can I do to ensure that my value is not reduced during the next few months?"

So here are some common sense things I have learned by being on both sides of the table. I know that buying firms will look for chinks in the armor.

1. Get your accounting/books in order.  Make sure your revenue recognition is above board and ready for inspection.
2. Are you an LLC? Consider converting to C or S corp.
3. Do you have contracts, especially with your major customers? No? Get them. Yes? Get them in order. How long are the contracts?
4. Be prepared to explain dips in sales and do not let sales dip in the next few months.
5. If possible, decouple yourself from sales. Am I buying the business or am I buying you?
6. Are you mentally prepared to stay working with the buyer for a while? If you are the chief salesperson, they may want you to stay and transition.

Finally, I give the same advice to all. Imagine you are buying a successful 80+ person IT consulting practices where the CEO is the chief salesperson. What things would you not want to see that you would reduce the price you are willing to pay?

As fast as possible, make a list and start fixing.

Hope this helps. Good luck.

Don

The advice above is extremely sound, and the one addition I would suggest is be aware of your own emotional readiness to let go. While you work to make the company less dependent on you, you also need to untether yourself from the company.

Many business owners and executives pour their heart and soul into the organization, and the company becomes an extension of our personal identity.  I have worked with many executives that struggled with the emotional dimension of their exit strategy.  It can be a roller-coaster ride of emotions.  Self-awareness is extremely important to ensure you have a gracious, smooth transition to the next phase of your life.  

As you act on the guidance given above, the company will respond and become a stronger organization.  
You will (and rightly so) be proud of the company you built.
You will get tremendous satisfaction from work.
Dare I say it... you will have fun.  

You will feel conflicted about leaving, but remember, you need to leave.
Be ready for the moment when the company no longer needs you.
Mentor staff as they take on new responsibilities, and fight the temptation to take back control of specific business aspects.

Stick to your exit plan timeline.  
Don’t let your ego or emotions get the best of you.