A group of businesses gathered on Monday evening at the invitation of the Inglewood Development & Tourism Committee and Loddon Shire Council, to learn how to plan a successful business exit when the time is right.
Startup Central Victoria’s Kerry Anderson provided context. “Even a startup in its early years should be thinking about when an exit is appropriate whether it be in five, twenty, or even forty years’ time.”
Special guest was Michael Kerr from Kerr Capital who shared over twenty years of experience in guiding owners to prepare their businesses for sale. “Selling is an emotional roller coaster,” he said. “The more you prepare, the better the outcome. Ideally it is a four-to-five-year plan.”
Michael encouraged businesses to think from a buyer’s perspective when preparing for sale. “Get your accounts in order. Tell your story.” While four years of financial transactions will provide a solid picture of how your business has been performing, he said that owners shouldn’t be afraid to project what the figures might look like into the future.
“Talk with your taxation accountant early so you have a plan for anything that might need to be done in the leadup, so you get the best outcome when you do sell,” he advised. Discussion also touched on the advantages of separately valuing the business from the property. “Think about whether you need to make any changes to your business structure. If your business is profitable, it could give you the option to sell the business and lease the property as a passive income.”
Finding buyers can be time consuming and costly. Michael suggested researching and then approaching similar businesses that might like to branch out into a new part of the region as a way to broaden the potential buyer pool. Depending on the type of business, he also advised to consider the benefits of a specialised business broker to assist with a sale over a property realtor who may just focus on the land, bricks, and mortar. “And you can always do it yourself.”
“You don’t like to think about retirement,” said one of the business owners in attendance, “but now we know that we need to work with our accountant and get the books in order. This has given us a timeframe to work to.”
In closing Michael invited guests to listen to his Owner to Owner Podcast and Kerry reminded everyone that there is free access to mentors and resources through Startup Central Victoria.
Wendy Murphy, Secretary of the Inglewood Development & Tourism Committee thanked everyone for attending. “This has been a useful discussion to help local businesses understand how they can exit in a positive way that benefits the seller, the buyer and the community.”