Why groom your business for sale?
There are a number of reasons, but the most common one is this: to satisfy the desire to release capital for new projects or for financial security.
The other reasons are:
- to deal with the reality that you are unwilling to manage or have become incapable of managing your business because it has now grown to a size well beyond your expectations, or none in your next generation has shown interest to take over the business should the need arise.
- to give the current management team the opportunity to become co-owners of the business as a reward for their loyalty.
- to find a much bigger partner to grow the business.
In a way, grooming your business for sale is getting into the shoes of a potential purchaser and looking at the business objectively, even critically, to find reasons why it makes good sense to buy the business.
A move toward putting the business up for sale is something that cannot be taken lightly, regardless of business size. It requires exertion of all-out effort to make sure that the business is sold successfully on the first attempt.
It takes time to prepare your business to make it attractive for sale, and for this reason you need to start the effort early so that when the opportunity to sell comes, you are well-prepared and can deal with qualified buyers confidently. Moreover, you have the self-assurance that the business is in the best possible condition by the time you pass it on to the next owner