Larry Lane, Owner of the VR office in McKinney, Texas, was recently showcased in the Dallas Morning News, offering useful recommendations to small business owners who are looking to sell their business.
In the article, Larry discusses five tips to plan for an exit strategy:
Setting a Timeline
Since it can take more than a year from listing a business for sale to completing the transaction, the best time to sell will always remain when a business has a growing revenue stream with profits at their peak and more untapped potential to have greater success.
Making Sure the Business is Ready
The business should have a diversified customer base where no client makes up more than 15 percent of the total sales. A strong management team should be in place with updated equipment and software.
Focusing on Profitability
Make sure that the business has maximized their profits. Many business owners will instead maximize expenses to minimize profits, which in turn minimize taxes; however, this will turn away potential buyers who focus on profitability. Remember, most business transactions are based on a multiple of earnings.
Learning Business Valuation Trends
Most owners need to be educated in the importance of having a valuation done on their business to avoid offering the wrong asking price.
Understanding Tax Ramifications
Make sure that the business owner understands the full tax implications of a business sale. Have the owner visit an accountant to cover all the odds and ends, and ask him or her if they would consider providing seller financing – this typically defers some taxes and allows for a higher asking price.
Larry saw the potential that VR Business Brokers has to offer, which led him to become a successful business owner of his franchise location in McKinney, Texas in facilitating the buyer and selling of businesses.
For more information about owning your own successful VR Franchise please contact VR Headquarters at (800) 377-872.
For a quick review of the VR Franchise please see the VR Franchise Webinar slideshow presentation