We are talking all about what you need to do to prepare your small business in order to sell it. These are 5 steps that you have to nail well before you decide that you’re going to sell your business.
1. Plan 3 years out and start pulling out your time
3 years allows you to look at profits, it allows you to look at your staff and your automation. When you do this, it helps you be better positioned to get the maximum return from all that hard work that you put into your small business. Make sure that you are taking the time to pull out as much of your time from your small business. Because when you sell a business, especially a service-based business like counseling or coaching practice, what happens is oftentimes owners say ‘I’m making six figures or multiple six figures, why wouldn’t someone pay for that?’ But all of it is based on their time. In the 3 years before you sell, start to step back or at least separate your own income from the income of the other people that are in your business.
2. Automate, delegate and eliminate tasks to improve efficiency
Take the advice of Rory Vaden, and this is true with any business let alone one that you’re looking to sell: are their tasks that you can eliminate? Eliminate those tasks that are just not at all useful for your business. Then you want to automate tasks, is there technology and are there systems that you can use that are going to better position you to have more time within your business. Lastly, you want to delegate those tasks so that you are being fully removed from your business well before you sell it.
3. Maximize profits and streamline your team
When you look at the income that’s coming in, where is there low-hanging fruit that you can maximize? This could be that you’re raising your rates, leaving bad insurance companies, adding clinicians to your practice so that you can really automate beyond your own time. When you maximize, especially in the three years leading up to selling your practice, that’s a great time for you to be able to maximize your profits.
4. Hire motivated people that may want to purchase the business
In the three years leading up to selling your practice, you should be hiring motivated people that could be potential buyers. This time in the three years prior is a great time to groom other people that might be able to buy the practice. They can start to take some leadership and understand how the business works while also being people that may want to buy the business later on.
5. Mentally prepare yourself for life after the business, look for opportunities on the other side
Think about the fact that you’ve built this whole business so what’s it going to be like to let go of it all. What’s it going to be like for you to be able to think about something new and to work on other things.
These are all things that you should do probably whether or not you’re even thinking about selling. It’s going to allow you to create a stronger business beyond just yourself. The problem a lot of people get into is that they may be bringing in the money but it’s entirely based on their own time. Because of that, if they’re sick or their kids are sick or they go on vacation, they’re not making money through their business. This is all about raising the level of what it means to be a business owner. So whether or not you’re selling a business or even think that it’s on your radar, do these things so that you can continue to make it even more professional to actually own a business rather than just give yourself a job.
We have tons of resources over at practice of here. If you’re looking for some extra help around selling a practice, scaling it or going after big ideas like podcasting or a course, I’d love for you to apply for some consulting here, we’ll jump on a call to see if you’re a good fit with me or with my team.
Joseph R. Sanok, MA, LLP, LPC, NCC
Joe Sanok is an ambitious results expert. He is a private practice business consultant and counselor that helps small businesses and counselors in private practice to increase revenue and have more fun! He helps owners with website design, vision, growth, and using their time to create income through being a private practice consultant. Joe was frustrated with his lack of business and marketing skills when he left graduate school. He loved helping people through counseling but felt that often people couldn’t find him. Over the past few years, he has grown his skills, income, and ability to lead others, while still maintaining an active private practice in Traverse City, MI. To link to Joe’s Google+