Lehigh Financial Group

cash flow benefit assumed by the owner or future owner? Most businesses have discretionary and one-time expenses that need to be normalized.

b. Evaluate your people. Is your organization able to operate independently from you, or are they very dependent upon your day-to-day involvement? Are they capable of running the company? Your employee capabilities can have a significant impact on the intangible value of your business.

c. Evaluate your clients. How dependent is your business on a few key clients? Is there client “stickiness”? Is it easy for them to switch to someone else? Are they heavily dependent upon you, the business owner? Uncertainty in future business will have a significant impact on the attractiveness of your business.

d. Evaluate your systems. A business with well-defined and documented systems and processes will have a much greater intrinsic value and will be more attractive to a new owner.

Whether you are looking to exit in the near term or long term, focus on the value of your business. Driving real value in your business and increasing the attractiveness to future buyers will also provide other positive outcomes, including increased sales and higher profits. Integrating written personal goals and financial plans with business planning enables you to maintain your focus on protecting, building, and harvesting business value. Preparation today is critical to enable a successful exit of your business.