Planning for the end…will it be a happy one?
We recently shone a spotlight on business exit strategies in the February PaySmart e-news, but I felt compelled to also dedicate my blog this month to the subject, as it’s such an important, but often overlooked aspect of business planning. Understandably.
Business people can find themselves consumed with ‘here and now’ and often don’t have the time or head space to project into the future and plan for the end.
And I don’t mean to make it sound doomsday, but we know good things usually do come to an end, and when the time comes to retire from your business or to move onto something else, how do you ensure you get a happy ending?
How do you guarantee a return on your investment when you put your business up for sale?
Any strategic business advisor will talk you through a list of things you’ll need to chip away at over time to prepare yourself for a successful sale, but one thing is for certain, being able to demonstrate secure and ongoing cash flow will be a definite advantage.
“The main reason most people buy a small business rather than starting one is for the established infrastructure and ongoing cash flow.” — NAB
Cash flow is also a major aspect in determining business value and if your customers make their payments through regular direct debit billing, you’ll have a really solid record of cash flow. A prospective buyer can see your pattern of performance and know that efficient and proven systems are in place that will help transition of ownership.
Cash flow is just one really important part of the mix and there are plenty of other factors that will determine a good sale price. So my advice would be to have a chat to your business advisor to get an exit plan in place for when the time is right for you and your business.
But until that time comes, I wish your business longevity and success!