For owners who will sell one day, but not this year
The best money you'll ever spend is spent three years early
At some point, you will exit your business. When you do, will it command a price that lets you enjoy the same or better lifestyle throughout your retirement? In our experience, more often than not the answer is no. The good news is that most of the reasons can be fixed, given time.
What lowers the price a buyer will pay
There are a variety of factors that devalue a business. The most prevalent are:
- Insufficient current profitability
- A lack of sustainable top- and bottom-line growth
- Overreliance on one customer, one employee (often the owner) or one vendor
- A lack of recurring revenue
- No demonstrated, effective management team
- No tools for measuring performance
Each one gives a buyer a reason to lower the offer, change the terms, or walk away. Each one is also far easier to fix three years before a sale than three months before it.
Getting the numbers ready
A buyer's diligence starts with the financial statements, and a business that cannot produce clean, timely numbers pays for it in the price. For contractors and construction companies, sale-ready financials from Zach M Miller CPA PC covers the statements, adjusted earnings and job history a buyer's accountants will test.
What you get
- An outside view of how a buyer would value the business today
- A clear list of what is lowering that value, in order of what to fix first
- Help putting the fixes in place, from people who have run businesses through a sale
- A business that is more profitable to own while you still own it
What happens next
- A conversation about your timeline and what you want from an eventual sale
- A review of the business through a buyer's eyes
- A plan that addresses the biggest value challenges first
- Regular check-ins as the business gets ready for market
Questions we hear
How early should I start preparing to sell?
Ideally about three years before you plan to go to market. Many of the issues that lower a business's value, such as reliance on a single customer or on the owner, take time to fix convincingly.
What lowers the value of a business the most?
The most common factors are insufficient current profitability, a lack of sustainable growth, overreliance on one customer, employee or vendor, a lack of recurring revenue, no demonstrated management team, and no tools for measuring performance.
Do I have to commit to selling through Junious?
No. Preparation is valuable whether or not you sell, and whoever you choose to represent you at the time.
Start with a conversation
Tell us where you are and what you want from the outcome. Every conversation is confidential.