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Article: Planning Your Exit – Selling Your Business

MarkB

MarkB

New Member
Staff member
As a business sales agent with over 30 years’ experience of selling Scottish businesses I am constantly surprised at the lack of thought business owners give to their eventual business exit strategy, particularly when the eventual plan is to sell their business.

Typically business owners either start up or purchase a business and work very hard to make them a success which is admirable, sensible and fully understandable. What the vast majority fail to do is to plan for the future and their eventual retirement or a move in the future. Most simply make a decision they want to sell, for whatever reason, speak to a business sales agent and place their business on the market.

This often results is a sale not being achieved or a sale achieved after a lot of stress and often not at an optimum price. If it’s likely that your business exit strategy is to eventually sell your business my advice is to start thinking and planning for the sale from day one!

Here are a few suggestions on how this can be achieved:-

• Keep a progress file. For property based businesses (restaurants, cafes, shops, pubs retail shops etc) this could include before and after photographs showing the work that has gone into improving the premises and where major capital expenditure is incurred copies of the invoices.

• Keep clear trading accounts, by using Sage, Xero or Smartbooks etc not only will you be able to keep on top of your businesses financial performance you will have extensive trading figures to show a potential buyers. Remember that accounts whilst you are in business are used mainly for Tax purposes, it’s the accounts of your business that will be of the greatest importance when your business value is being assessed.

• When possible don’t make yourself irreplaceable. Try to make each area of your business work on an established system making your own role clear and possible to replicate by a new owner. Think like a franchise which offer new franchisees an operation manual explaining in detail how the business works and the roles of all employees/directors.


When you get closer to the time that you are deciding to place your business on the market try to take a dispassionate look at your business, try to look at it as a potential buyer would and then take all steps you can to make the business as attractive as possible to potential purchasers. This will include being realistic about your businesses valuation, how much would you have paid for the business when you were looking to buy? Over pricing businesses is the number one reason that businesses stick on the market.

Derek Burgoyne is a director of Cornerstone Business Agents and has been selling businesses in Scotland since 1985. Initially as a business sales agent with Christie & Co, then as co-founder of agents Bruce & Co which he sold in 2016 going on to launch Cornerstone in 2009.
 

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