Name your Buyer and be focused on them
Identify your end game very early.
You need to decide if you are going to have a business that stays in the family for years or even generations or whether this is a business that you will keep for a while and then sell onto someone else, either an industry buyer, competitor or private equity. You need to make that decision early and stick to it as the way that you will run the business will be very different depending on what choice you make.
If you are going to sell the business, select your buyer.
Work out who you are going to sell the business too from Day 2. There are likely buyers in all industries and in private equity. You should know who they are, what they like, how they value businesses, where their money comes from and what they are looking for. Make a list of all the companies and all this information. Keep it updated and know precisely who it is that is most likely to buy your business. You will know who those players are in your industry and beyond, and, if you don’t then research it.
Always be for sale.
You can’t predict the timing necessarily of when a buyer is looking for a business. Always be for sale, always be somewhat ready and never rule out the possibility. Now, of course, be very clear of what your price is and don’t be afraid of getting it out there in the first approach. Just like selling your property, if someone wants to buy your unlisted property, then be very clear on what you would accept and the terms. Get that out there fast and don’t waiver. Don’t allow people to wander on through and waste your time.
Think due diligence.
Someone one day will do due diligence on your business. I know it is hard but think about this while you run the business. It is a challenging process for any company, let alone a small one that may not have all the things in place and structure of a large company. Think about how you:
label folders on server storage
label files with dates and clear descriptions
purge unnecessary information
always think about IP, who owns it, where it is and how to identify it
The due diligence process, which will ultimately come in some stage of your business, can be a lot easier if you think a little in advance when you are small and start some basic practices.