You may have seen the news- Adam Shay CPA, PLLC has been acquired by Red Bike Advisors! Selling the business was one of the most challenging things I’ve ever done, both mentally and emotionally. I am highlighting some things to consider if you are interested in selling or exploring the sale of your business.
Pre Transaction
- Understand Your Why and the Who. Why do you want to make a change? What do you want your post transaction life to look like for yourself? Your team? Your Customers? If max value is your priority, a strategic buyer with synergistic capabilities and the ability to capitalize on joint customer lists to cross-upsell is best. If you care deeply about your team an individual buyer is often best because they'll typically keep nearly everything in place. A financial buyer is looking for ROI for investors and often wants you to stick around as the operator so it is good if you just want to cash in your chips but stay involved. Competitors are often easiest because they "get it."
- Be Prepared. It's vital to conduct a comprehensive evaluation of your business. Assess its financial health, market position, growth potential, and any potential risks or challenges. Determine your business's value by considering factors such as revenue, assets, intellectual property, customer base, and market share. This evaluation will help you understand the strengths and weaknesses of your business, enabling you to make informed decisions during the exit process.
- Make Improvements (Enhance Value). To maximize the value of your business, focus on enhancing its attractiveness to potential buyers or investors. Improve your financial performance and records, streamline operations, and strengthen your management team. Invest in marketing and sales efforts to boost revenue and customer loyalty. Protect your intellectual property and secure long-term contracts. By actively working to enhance your business value, you'll increase the likelihood of attracting the right buyers and commanding a higher selling price.
- Engage Professionals. Engaging the services of experienced professionals, such as business brokers, accountants, lawyers, and financial advisors, is crucial when preparing for an exit. These experts can provide valuable guidance and support throughout the process, helping you navigate complex legal and financial matters. They can assist with valuation, deal structuring, due diligence, and negotiation, ensuring that your interests are protected and your objectives are met.
- Plan for Life After Exit. While focusing on the exit itself, it's equally important to plan for your life after leaving the business. Consider your personal and financial goals, and explore opportunities for investments or retirement plans. Think about the legacy you want to leave behind and how you can support your employees and stakeholders during the transition. By proactively planning for the post-exit phase, you can ensure a smooth transition and set yourself up for success in the next chapter of your life. Personally, I've chosen to stay on with Red Bike Advisors as the Director of Virtual CFO services. I'm handing firm administration to my buyer and am looking forward to focusing on helping clients manage cash flow and grow their businesses.
Post Transaction
Be prepared for the hard work to begin as you help transition branding, technology, processes, and employees to the new buyer. Expect 60-90 days for your transition and expect it to be a roller coaster ride.
Preparing your business for an exit requires careful planning and strategic decision-making. By evaluating your business, developing a solid exit plan, enhancing its value, seeking professional advice, and planning for life after the exit, you can navigate this transformative process with confidence. If you are considering a business sale, we are happy to help serve as an advisor through that process.
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