9 Strategies to Ready Your Business for Success(ion)

One day you will exit your company—like death and taxes, this is a certainty. And by staying aligned with current financial and business practices, you can also be certain you’ll be ready to act when opportunity knocks. This “ready” approach allows you to take advantage of unexpected opportunities and ensures your business is always running smoothly and efficiently. Get started now by employing HINGE Advisors’ “ready” strategies below.

Develop and Maintain Your Financial Health

1. Keep Timely and Accurate Financial Data.
Ideally, you should produce monthly Profit & Loss (P&L) statements that are ready and available for review by the 10th of the following month and have them accessible in Excel, if possible. This will allow you to make timely decisions regarding your business and help you better understand your cash flow and profitability. It also shows buyers your attention to the financial aspect of your company. Pro tip: Have at least the last three years of P&Ls available when you’re ready to start the valuation process.

2. Document Your Personal Expenses.
Whether you’re ready to sell now or you’re several years away, consider separating any personal expenses—which are generally removed during a valuation process—from your business expenses. Examples include any personal expenses you run through your company like salary, cell phones, travel expenses, vehicles, etc. Expensing personal items is not an issue in the process, just be able to show documentation.

3. Implement Sound Processes and Procedures.
Stay current with industry processes and systems that help to automate your business. Implement and refine these processes so you are maximizing efficiencies and minimizing time spent on administrative tasks.

4. Maintain and Update Your Facilities.
Keep your facility in top form by immediately handling repairs and upgrades to achieve desirable efficiency and aesthetics. A facility that is attractive to prospective customers increases the value of your business.

Take Advantage of Growth

5. Grow and Develop Your Team.
Being a business owner is like being a parent—your number one goal is to work your way out of a job. So when your team is developed and ready to run the company without you, let them! This will increase the value of your business and provide more opportunities for team members to grow within your company—helping to attract and retain top talent.

6. A Larger Company Means Greater Value.
Take advantage of opportunities to expand your business through a larger offering or new sites. Larger companies bring higher value through both the scale of cash flow and the multiple assigned to it. Once your financial health is strong and your team is primed, you are ready to answer when opportunity knocks. A larger company also brings economies of scale in expense control and prevents the risk of changes in individual site performance.

Develop an Options Strategy

7. Develop a Transaction Team.
Get aligned with advisors who practice in your industry. You will need a CPA that understands the tax ramifications of selling, a transaction attorney, and a business transaction advisor (like HINGE Advisors!) that operates in the industry and has buyer relationships. Running a confidential process is vital and having an Advisor who can go to the buying pool discreetly, without publicly marketing, is critical. In addition, your Advisor should have a great reputation and be able to provide solid references for your review.

8. Groom Potential Family Members or Internal Buyers.
If you are considering transitioning the business to a family member or employee, be sure they are ready to run the company without you and have the resources to be successful.

9. Get to Know the Buyers in Your Industry.
Develop relationships with those interested in investing in businesses like yours. Learn as much as you can about what they are looking for and align your company to be as attractive as possible.

If you want more tips on how to employ a “ready” strategy at your school so you’re prepared to sell when opportunity knocks, contact our team at info@hingeadvisors.com or 864-554-4498.