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Why removing yourself from your business is the best preparation for sale

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By Jo Thornley, Head of Brand and Partnerships at Dynamis

It’s old advice: ‘To sell well, you have to think like a buyer’.

If you’re thinking of selling your business, then getting a good price means proving your business has a future without you at the helm. And what better way to demonstrate this than by removing yourself altogether? 

This article discusses some important issues you’ll need to consider in order to achieve that goal.

What will you gain by leaving?

Anyone seeking to acquire your business will be keen to understand how your company will look in future years once you have sold.

Even though your thriving enterprise may be long established and very well run, it’s often a mistake to stay on close to the point at which you plan to sell. 

This can leave potential purchasers with something of a conundrum: Your business is doing well, but how much of the performance is due to your own influence, rather than the efficiency of your systems and staff? 

Once you are able to action making yourself dispensable to your business, you are putting yourself in a good position to sell at the maximum price.

How to stand down from your role

How long it takes to make yourself redundant will largely depend on the current status quo within your business. 

Firstly, you must assess each area of your company to determine who the key decision makers are. 

If you have a strong team and good management structures, then you are already well on your way. However, if you are a key figure in company workflows, then you will have some problems to address. 

There are a few important questions to ask yourself in this scenario:

- Is there a senior staff member who is able to take on the majority of your responsibilities?

- Can your responsibilities be spread out amongst a team?

- What can’t you train others in that should be put into any handover documents?

Also, consider putting a team in place who are able to win new contracts – as well as retaining ‘legacy’ relationships – this will show things are run competently and on a proper commercial footing.
Sole traders

So, what happens when you are a sole trader wanting to remove yourself from the business in order to sell? 

The main focus of this seemingly impossible task, is to make your brand, and your products or services the significant factor of the business - rather than yourself and your personal relationships.

When working towards making yourself redundant as a sole trader: 

- Suppliers and other external contacts should gain trust in your business as it stands, not on your own friendly acquaintances. 

During preparation for sale, begin to work on the business’ loyalty and credibility with suppliers and contacts, rather than one person. Start by expanding your reach to others in a supplier’s company, not just who you have gotten to know.

Once securing a sale, if it is possible, introduce your buyer to any external contacts.

- Be open with regular customers. If your customers have trust in you, use that trust to establish a new relationship between the buyer and customers.

- Again, handover paperwork is vital. Creating documents that may even seem tedious to you, will leave your buyer far less likely to turn to you with any unanswered questions. 

- It can even be worth considering hiring an employee. It may be a costly move, but it could prove to be a worthwhile investment to ensure the business is not reliant on you. 
Testing the resilience of your business

You can carefully train, advise, coach and mentor your successors, but the only way you’ll really know they’re ready to fly is by testing them out. Essentially that means going on holiday in ‘do not disturb’ mode and trusting your protégées to step up and perform. 

Your absence should be long enough to demonstrate that management and staff can operate autonomously – if you take only a short break, some understudies will be tempted to just put decisions on hold. 

If this isn’t viable, having a very clear plan of how the business will function without you will ultimately leave a path for your buyer to follow and lead on from.

So, the upshot is that your own redundancy from your business must be a well-planned event that should take place well in advance of any move to list your business for sale

By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between, and and likeminded companies.