Profit With a Plan Podcast
The Hidden Benefits of Preparing Your Business for Sale
With Marty Fahncke
Host: Marcia Riner | Business Growth Strategist, Infinite Profit®
Episode Summary: In this insightful episode, Marcia Riner and Marty Fahncke delve into why every business owner should prepare their business for sale, even if they never plan to sell it. Marty, who has helped hundreds of small businesses scale to over $1 Billion in revenue and facilitated $450 million in acquisitions, shares his expert insights on how proper preparation can significantly increase a business's value and readiness for unforeseen circumstances.
The Hidden Benefits of Preparing Your Business for Sale
With Marty Fahncke
Host: Marcia Riner | Business Growth Strategist, Infinite Profit®
Episode Summary: In this insightful episode, Marcia Riner and Marty Fahncke delve into why every business owner should prepare their business for sale, even if they never plan to sell it. Marty, who has helped hundreds of small businesses scale to over $1 Billion in revenue and facilitated $450 million in acquisitions, shares his expert insights on how proper preparation can significantly increase a business's value and readiness for unforeseen circumstances.
- Key Talking Points:
1. Marty's Journey and Expertise: Marty shares his extensive background in business growth and acquisitions, emphasizing the lessons he learned along the way. His experience highlights the critical importance of always being ready to sell.
2. Why Every Business Should Prepare for Sale: Marty discusses the often-overlooked reasons for preparing your business for sale, including the "Four D's and a B" (Divorce, Debt, Disagreements, Disease, and Burnout). These factors can unexpectedly force a business sale, and being prepared can prevent financial loss and ensure smooth transitions.
3. Steps to Maximize Business Value: • "Even if you never plan to sell your business, things can happen that might force you into it."
• "Preparing your business for sale, even if you never plan to sell it, is a wonderful thing no matter what."- Get Your Financials in Order: Accurate, up-to-date financials are crucial. Marty emphasizes the need for professional bookkeeping and accounting to ensure your financial health is transparent and appealing to potential buyers.
- Implement an Operating System: Establishing a comprehensive business operating system enhances efficiency and streamlines operations, making the business more attractive and easier to transition.
- Owner Exit Plan: Reducing the owner's involvement in daily operations increases the business's appeal to buyers, as it demonstrates that the business can run independently.
- Identify Your Buyer: Building your business with a potential buyer in mind helps ensure it meets the criteria that make it attractive to future owners.
- Understand Your Valuation Target: Knowing your business's true value and what it takes to reach your financial goals is essential for long-term planning and eventual sale.
- Focus on Profit, Not Tax Mitigation: Prioritizing profit over minimizing taxes increases your business’s valuation, making it more appealing to buyers.
- Prepare for the Long Term: Maintaining clean and profitable financials and operations for at least three years before a sale can significantly enhance your business's value and appeal.
Key Quotes: • "Even if you never plan to sell your business, things can happen that might force you into it."
• "Preparing your business for sale, even if you never plan to sell it, is a wonderful thing no matter what."
• "A business that revolves around you is very difficult to sell because I can't sell you."
