4 Exit Strategy Tactics That Will Help You Sell Your Business in 2020
It’s almost the end of 2019 and different business trends for the succeeding year are already in place; and as usual, technology and the fast-paced advances of society were still the determinants of business trends. Small businesses have always been dependent on the “what’s in?” and “what’s cool?”; however, changes in the economy will always affect your business. It may either be the slow fading of traditional employment, the slow taking over of digital information and machinery, or the slow adaptation of the companies to the modern customer. Whatever changes 2020 may bring, it is best that you plan ahead.
But how can you plan effectively? 52% of company owners would want to sell their business according to their exit strategies. In fact, according to the Investor Watch Report conducted by UBS Global Wealth Management, it was found out that business owners don’t have a full understanding of how to sell their businesses. They think that they can just sell their businesses without planning ahead. That is a dire mistake. When you don’t plan your exit strategy, chances are you will never maximize profits from it. You may even end up indebted to other companies or other persons.
This is the reason why crafting exit strategies are important to you as a small business owner. Regardless of your reason to exit or how you would want to exit the business, we have listed some tactics that will help you win through the tough changes that 2020 may bring:
Engage your customers in social media. We all know that social media is the big thing today. Through this, customers are able to discuss things and give their opinion on certain products and services. Thus, when you use social media, you will be opening a direct line of communication with your customers. When this happens, you will be able to get their insights on how to better improve your services or products. When you constantly talk with your customers in social media, you will have a general understanding on why they buy your products; you may also get to know how loyal they are in purchasing what you offer. Using the data in this interaction, you will be able to predict if you should sustain your business or put it in the hands of a more capable and new CEO in order for it to evolve and adapt to the demands of the customers.
Boost your profitability. As a small business owner, it should be your goal to maximize sales profit. This will not only boost the overall value of your business, but it will also allow you to develop good relationships with your suppliers and customers. In ensuring good profitability, you will be able to see how your business grows – how it adapts to change, how it is accepted by the public, and how it evolves from where it started. With this, you will be able to know if you can manage such developments in your business. Will you abilities and skills be enough to sustain the growth of your company? Or will you be needing a plan on how to properly turnover your business to someone who has more experiences in operating such businesses. Keep in mind that changes will happen in 2020, and alongside your skills, you must also know if you will be ready for that changes.
Ensure the readiness of your documents, including your bookkeeping. Be pro-active. When you exit your business, all your documents should be ready for turnover or for due diligence; and if you are liquidating your company, your documents must also be ready so that your business can be assessed for its current value. Whatever the reason is, updated documents and accounts are signs that you are managing your business properly. Moreover, properly accounted documents will give you insights if there is something that you need to settle or improve in terms of profits. This is an advantage that will give you more traction in whatever exit strategy you have chosen.
Get a business valuation. It’s true that you will never know the exact value of your business until the day that it is sold. However, you can get estimate valuations regularly in order to assess the performance of your business and its impact on the customers. In getting a business valuation, one trusted tool that you can rely on is The Value Builder System which uses a scorecard to grade your business performance. You can also use this link for your business valuation: https://score.valuebuildersystem.com/transphorm-llc/brett-pittsenbargar. Remember, a business valuation is like a regular check-up of your business. By doing this, you will be able to note the elements in your business that should be improved and determine the elements that you need to let go of. Also, this will give you more time to prepare before you set into motion your exit strategy.
Brett Pittsenbargar With over 20 years of investment experience and a track record of business development in contracts, negotiation and due diligence, I am uniquely positioned to help owners exit their business or implement strategies to stimulate growth and keep existing employees happy. I strategically invests in SMBs while serving as an influential reference point for key stakeholders. I am thrilled to partner with hard working business owners that dedicate their lives to their work and need a reliable investor who they can trust to navigate the waters during transitional phases. Small business owners face several challenges coupled with legal barriers that oftentimes lead to the unsuccessful sale or transition of their business. I create only win-win opportunities for business owners and look forward to becoming true partners with companies I am proud to have a stake in. Published Articles: Thrive Global ACHR News TechBullion SmallBizDaily NBC EPN Yahoo Finance Seeking Alpha Seguin Texas ADP Bank Of America
Disclaimer: This article is intended to give you general business information, not to provide specific legal or financial advice. Be sure to consult your attorney, accountant, and financial professionals for any specific questions relating to your business.