Put your decisions to the test

Things to keep in mind if you’re planning to sell

As an entrepreneur, if you are building a company that exhibits solid potential for future growth, you will be in an ideal position when it comes time to retire and sell the business.

Investors are attracted to growth industries and growth companies. They want to know that their investment will provide them with the best return possible, based on expectations of future revenue growth and cash flow.

Successful entrepreneurs will adopt a “build-to-sell” mentality, which means subjecting every decision and investment to the test: “If I do this, will it make my company more valuable and more attractive to a potential future investor?”

For example, say your core business is building custom staircases for the high-end residential market. You have an excellent reputation and a strong niche market, and you’re making a pretty good living, but profit margins have been slipping. There is proven technology available that will automate key processes, drive your costs down, and significantly improve your margins. Do you explore making this investment, or do you keep the status quo? If you are building the business with a view to selling it when you retire, you will take the path that maximizes your operation’s productivity, profit margins and competitiveness. That’s what a new owner will be prepared to invest in.

If you’re planning to sell the business to finance all or some of your retirement, above are some other “dos and don’ts” you might want to keep in mind.