Baby boomer business owners listen up.  If you intend to sell or transition ownership in your business within three years, you should start positioning your business now to be attractive to buyers. Why so soon? Well, it can take two years or more to implement actions to improve your business’ profitability and mitigate its value reducing risks. Don’t forget to add another year to complete the sale process!

This is the time of year business owners review their strategic/business plans.  As boomer business owners get older, it is unwise to develop or revise your strategic/business plans without first thoroughly understanding your personal (including retirement), financial, business and legacy goals. These goals will provide guidance as you develop or revise the plans. Consider engaging an experienced business ownership transition planner (i.e., an Exit Planning consultant) or some other person you trust to be brutally honest with you as you develop these goals. The return on investment, including peace of mind associated with Exit Planning can be significant.

As you approach your ownership transition date you need to be aware of how your decisions will impact your company’s valuation and attractiveness to a buyer.  A few examples of these decisions are product/service pricing, investment in new product lines, business acquisitions within or outside your core business, strategic relationships, new marketing campaigns, geographic market expansion, making major equipment investments, and taking on business that significantly increases customer concentration, etc.  A more specific example might be a franchisor experimenting for the first time with operating corporate stores.  The point is, the closer you are to your ownership transition date, the less room you have for taking risks that may impact your company in a negative way. As you develop your plans, consult with an experienced merger & acquisition advisor to obtain his/her expertise on how your decisions will impact valuation and your ultimate ability to attract the best buyers.

In closing, please remember my mantra.  That is to plan, optimize, sell, then live your dreams!

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