Tomorrow is important, today is urgent – and like many matters that are important but not urgent, there is a way to get them done: create a process.
According to an ASB Succession Monitor Report, between October 2008 and April 2011 the number of business owners planning to sell after three years has increased by 22 percent.
Experience suggests you need a minimum of three to five years to gear up for a sale.
In those years, here are the five most important actions you need to take:
Undertake a business diagnostic
This is a thorough review of your business – warts and all. It is designed to assess where the business is currently at, a level of risk analysis and an identification of the areas where the business could improve.
Complete a valuation
You need to put a stake in the ground and know what the business is worth. Does the figure meet your expectations? Many owners over-value their company – but the good news is that there is probably a lot that can be done (see below) to get the value up.
Start on the housekeeping
Often we see businesses where some of the history needs to be cleaned up. This is often reflected in the balance sheet and may take some time to sort through.
Based on your diagnostic, start making changes in the business that will result in permanent and measurable improvement.
Get your reporting right
Create a reporting and results trail that tracks the changes and the improvements achieved. At the same time build your forward budgets and estimates around the leverage that will come out of the change.
Once you've worked through this and established your trends over a three-plus year time period, then you'll be ready to go to market.
Mike Atkinson is a senior business improvement manager at Bellingham Wallace.