A recent Wall Street Journal Article (WSJ 8/31/12) ’The Economy Stole My Retirement‘ presents the issue of small business owners who can’t sell their businesses – at least not for the amount of money they want or ‘need.’ They blame the economy for being ‘robbed’ along with many aging baby boomers exiting their businesses in the coming years (one way or another) creating a glut of businesses for sale. It’s like the housing market; depressed values and a lot of inventory.
On the other hand, houses are selling every day; some more quickly and at a higher price than than others. A well maintained and updated house in a desirable location with curb appeal, a solid foundation, a smart layout and nicely finished interior is going to attract more attention and fetch a better price and terms. And, even if it doesn’t sell as quickly as expected, it is much more enjoyable to live in.
Like a house, there are ways to increase the value of your business in any economy; like making your business less dependent on you being there. Some things are simple (not easy) like changing habits (stop stepping in so fast to solve problems yourself), being intentional about staff formation, and delegating more effectively by being clear about purpose, outcome and accountability. Other improvements require a financial investment like hiring the right people and updating technology. Avoidance and delay is the well-worn path of least resistance, but “deferred maintenance” is always more costly in the long-term.
So, what kind of shape will your business be in when the time comes to sell? Will it be prime property or will you be trying to unload a fixer-upper…