Selling your business can be a daunting task and it is in fact a long process.
Whether you’re looking to have extra hours at your disposal or simply trying to move on to your next venture, there are quite a lot of things you need to consider before placing your business on the market.
So, if the thought has ever crossed your mind, then this is a great way to start navigating this transition!
Join me in this episode, as I share my thoughts on how you can get things in order, and what important things you’ll need to consider before signing that sale.
Major things you need to consider when selling your business (or just considering it!):
How efficient are your business operations
- Your Role – As the CEO of your company, you have got to assess if all of the processes are reliant on you. What we don’t want is the business being too dependent on you. And if it is, then you need to find a more efficient way to delegate these revenue-generating tasks. The business should be able to run without relying on you to check every single step or decision.
- Your Team – A strong foundation can operate together if you have a clear cut of the process you’ve done. There are a lot of things that your team can do if you delegate tasks. What we actually did is to cross-train my team for the role that I have been doing for years. So, now, even if I’m on vacation, we can easily handle transactions without waiting on me to get back.
- Your Business – This is something that you might have done already and that is your business process. You need to know whether the process that you have right now is in its best state. Make note of the redundancies, and find ways to streamline or automate these workflows.
How are your finances
- Bookkeeping – Anyone investing or planning to buy another business would definitely dig up every record you have and this can be a lot. The big numbers are what you need to know. EBITDA is one of the things that you really have to be aware of. Make sure to separate the revenues and categorize the expenses your business has.
- Cash Flow – Be aware of the ins and outs of every penny that goes through your business. What does your cash position look like? Most of the time, investors would want to see your numbers. If it’s consistently high, low, or if it’s like a roller coaster. If you understand it, then you can talk about it better if you’re selling your business
- Burn Rate – As much as the revenue would be tempting, there’s the other side of it which is an expense and these are what the clients would check on in order to know the cost of running the business on a day-to-day basis, monthly or even annually. You have to know which ones are core business operating expenses vs other business expenses that are possibly not applicable to another owner.
- Accounting Method – It could be cash or accrual method. There are businesses that choose a cash method which means that the transactions are recorded once it goes in and out of the bank and there are also business owners who prefer an accrual method which would be recording the transactions as it was incurred. These two have their own pros and cons so you would need to think about them before transitioning one to the other.
There’s no one way of doing this, but hopefully these help you be prepared the moment you’ve decided to sell your business.
“Making sure you have a crystal clear look at all of those numbers for yourself is really important… and even if you don’t want to sell your business, you have just gained more insight you could use to help you make better business decisions.” – Stephanie Skryzowski
What you’ll learn in this episode:
- Things you need to know before selling your business
- How to avoid bottleneck-ing your business success
- Why understanding your numbers can help you make that sale worth it
Links in this episode:
More resources to help you step into your CEO shoes (and not overwhelm yourself):
- Your Business is NOT Your Baby
- How to Make Decisions Using Time vs. Money Margins
- Create More Space in Life (and Scale to Seven figures!)
- How to Build A Thriving Team
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Are you feeling stuck with what to do next to manage the money in your business?
Maybe you’ve logged into QuickBooks once or twice, but got instantly overwhelmed. Or you started to set revenue goals, but don’t know where to go from here. Maybe you simply know that managing your numbers is the right thing to do, but you don’t know what that actually means. Don’t worry, friend! I’ve got just the thing.
Managing Your Business Finances Like a CFO is my brand new 10 step checklist that will help you manage your business like a CFO without making it your full time job.
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