Let’s talk why looking at buying or selling makes great sense. All too often the owner of the businesses pays far greater attention to the day-to-day revenue/profit than the overall value of the business. Unfortunately, this does not change as they get closer to wanting to sell.
That is a primary reason why it is prudent to understand the value of your business as a key asset. Sure, you may be prepared to “pay the game” and adjust your profits to reduce tax, however it's a fool’s paradise. You are the one who is robbing the till when it comes to selling as many factors overtake your naïve reality.
Reality is that all businesses should be operated as if they were being readied for sale. A simple SWOT of the business should assist the owner make prudent decisions that will, or at least improve, and defend the existing worth of the business. Primarily, how relevant is the business to its existing client base both now and into the future. Is productivity being optimised? Will a buyer look at the business as an opportunity to buy some more clients for a low cost or, will they be able to look at it as an opportunity to more rapidly grow/improve their business? Obviously the second option is more likely to yield a better outcome than the former.
Grow or Go – just don’t stand still!!
“In the business world, the rear-view mirror is always clearer than the windshield.” Warren Buffet
Whether the objective is to Grow or Go the first steps are pretty much the same and I am sure you’ve heard it all before - Prepare, Prepare, Prepare! Boring but true, your job priority remains to largely manage your business. Stage 1 offers you several options: similar in application with individual outcomes.
- Strategic or Snapshot review - undertaking a brief strategic review of the business. To understand the position, you are currently experiencing – good, bad or indifferent.
- SWOT analysis - Preform a basic SWOT – Strengths, Weakness, Opportunities and Threats opens minds and doors to your plan of action.
If Stay of Go is on your mind read these helpful articles:
Stay Or Go article
What is your business worth?
Why a buy out is smart move?
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