Exit Preparation 1. Preparing For Sale - the journey begins
The first thing I want to say to anyone even beginning to think about selling their business is this. The process of someone getting under the bonnet to look at what they might be buying can be one of the most confronting experiences you’ll ever experience.
When you think about it, that’s no so surprising. It’s like selling a house, only turbo-charged. You will be surprised by how emotionally attached you are and how defensive you might feel when you start getting grilled about things you don’t think need discussing or when you get questioned about assumptions you’ve made. Truly, it can start to feel like they’re criticising your children.
That’s why I’ve written a programme for SME owners who are either definitely selling or are sales-adjacent. So much of the pain and suffering can be taken out of the process by preparing well and thoroughly.
Selling your SME isn’t a sprint; it’s more like a marathon. In New Zealand's hyper- competitive SME sector, having a business that stands out to potential buyers requires foresight, planning, and a bit of elbow grease. Based on the wisdom distilled from a 6-week intensive course designed for SME owners eyeing the exit door, here’s a more in-depth guide to getting your business sale-ready.
Step 1 - Strategic Business Planning
Your Business’s North Star
Kickstarting the journey, strategic planning isn't just corporate jargon; it's the blueprint of your business's future, a clear signal to buyers that you're not just winging it. A comprehensive strategic plan includes -
SWOT Analysis - Get real with what your business does well and where it could use some help. This insight isn’t just valuable for you; it tells buyers you understand the playing field.
Setting SMART Goals - These are your milestones, the tangible proof points you're moving in the right direction. They translate ambition into action, showcasing potential growth and stability to prospective buyers.
**Step 2 - Financial Literacy and Health **
Keeping It in the Black
Your financials are under the microscope when selling. Buyers want assurance they're investing in a financially healthy business. Key takeaways include -
Understanding Financial Statements - Like reading the tea leaves of your business’s health, these documents (balance sheet, cash flow statement, income statement) offer a snapshot of where your business stands.
Financial Forecasting - It’s about predicting financial weather, showing prospective buyers that sunny days are ahead, and you've got plans to handle potential storms.
**Step 3 - Leadership and Team Development **
The Heart of Your Operation
Your team reflects your business’s health and its future potential. This section dives into -
- Fostering Leadership - Being a leader that inspires not just directs, creates an environment where the business can thrive beyond your tenure.
- Cultivating a Strong Team Culture - A cohesive, motivated team is attractive to buyers, indicating the business won't falter during transitions.
Step 4 - Marketing and Customer Engagement
The Voice of Your Brand
How you connect with your market and engage customers can significantly bump your business's appeal. This involves -
- **Marketing Strategy **- Understanding who your customers are and how best to reach them ensures your business continues to grow and doesn’t stagnate.
- Customer Relationship Management - Engaged customers mean a stable revenue stream and growth potential, music to the ears of potential buyers.
Step 5 - Innovation and Technology Integration
Staying Ahead of the Curve
In a fast-paced world, being technologically savvy is a sign of a forward-thinking business. This means -
Embracing Innovation - Showing that your business is adaptable and can pivot as market demands change is crucial. It’s about proving your business won’t be left behind as the world evolves.
Leveraging Technology - Efficient use of technology indicates to buyers that your business is streamlined and poised for future growth.
S**tep 6 - Exit Strategies and Succession Planning **
The Smooth Handover
How you plan to exit your business can significantly affect its value. This final step emphasizes -
Creating a Solid Exit Plan - This demonstrates to buyers that you’ve thought about the transition and that the business is set up to succeed post-sale.
Succession Planning - Particularly for family-owned businesses or those looking to maintain their legacy, a clear succession plan shows the business isn’t overly reliant on its current owner to succeed.
Bringing It All Together
Selling your SME in NZ is no small feat. It requires a blend of introspection, strategy, and action. By following the steps outlined, you’re not just putting your business in the best position to sell; you’re also ensuring it continues to thrive under new ownership.
Each step, from strategic planning to succession planning, builds upon the last, creating a comprehensive picture of a business that’s valuable, sustainable, and desirable.
Strategic Business Planning sets the direction, Financial Literacy and Health showcases stability, Leadership and Team Development demonstrates depth, Marketing and Customer Engagement ensures vitality, Innovation and Technology Integration promises growth, and Exit Strategies and Succession Planning seals the deal with a vision for the future.
In the end, preparing your SME for sale is about more than just tidying up the financial books or giving your marketing strategy a spit shine. It's about deeply understanding what makes your business tick, what makes it unique, and how it can continue to succeed.
This preparation not only increases the attractiveness and value of your business to potential buyers but also provides a clearer path for its continued growth and success.
Final Thoughts
As you embark on this journey, remember, the goal is to present your business not just as a profitable venture but as a well-oiled machine that's ready for the next chapter. With careful planning, a focus on the fundamentals, and a keen eye on the future, your SME can stand out in the crowded, noisy NZ market.
Whether you're ready to retire, start a new venture, or simply want to pass your business on to someone who can take it to new heights, preparing your business for sale is a critical step on the path to achieving your goals.
By engaging with each step, NZ SME owners can better prepare their businesses for sale, ensuring they not only attract the right buyers but also secure a sale that reflects the true value and potential of their business.
Just a reminder. If you are even considering selling your business, I encourage you to have a closer look at the RHQ SME Exit Preparation Programme. It’s six weeks of your life that could make a profound difference and remember, you can do it all without needing to take your attention away from either your business or your family and I will be on-hand to help with whatever you need.
Click [here] for a summary of what the programme is about.