It is important to for small business owners to develop an Exit Strategy early on. A three-year plan is optimal; a three-week plan is distressing!
The following is a list of important items to include in your strategy. Identify and gather all appropriate documents:
- Tax returns for the last three years
- P & L and Balance Sheets for the last three years, plus the most current on you have available.
- Develop a year-end projection for the current year of sales and expenses. An explanation of any additional capital purchases needed, or recruitment of additional personnel required.
- A list of your top 10 accounts and the annual sales generated by each for the most recent year (if applicable).
- A list of assets that are owned by the company. The year purchased, make and model, and fair market value. Items like office furniture can be grouped together and listed as a group.
- A list of your key employees, their compensation and benefits, and how long they have worked for you.
- A description of your office space owned or leased, the terms if leased and options that are currently in place.
- A brief description of how you market your business and what areas generate the majority of your sales. Give percentages and breakdown of sales by specific sectors. Please also provide copies of any printed marketing materials you may have.
- Are there any pending law suit, employee or supplier issues a buyer should be aware of?
Upon your decision to exit, a business broker or intermediary, can help you value, market and sell your business, developing a current value for your business using the market approach, the income approach or the asset approach.