I recently co-hosted a webinar where we discussed the importance of prior planning in the law enforcement/military community, often referred to as “The 5 P’s”: prior planning prevents poor performance. One area where prior planning is crucial is in preparing an exit strategy to sell a company. In fact, the best time to start preparing an exit strategy is the day you start your business. However, not all business owners have a long-term vision or strategic plan in place for this.

Selling Is a Process, Not an Event

Selling a company is not an event, but rather a process. We have dealt with three types of business owners in this regard:

1. The entrepreneur who plans to flip their business within 3-5 years.

2. The business owner who intends to sell within 7-10 years and has an exit strategy in place.

3. The business owner who is motivated to sell their business, has an exit strategy, and aims to leave a legacy or establish a succession plan.

If you fall into category 1 or 2, Bravo Kilo Advisors is here to help. Our team prioritizes your goals and best interests. It’s important to make your business attractive to potential buyers, but ultimately you are looking for that one buyer who is willing to pay your asking price or negotiate around it. Understanding that selling your business is a process, not an event, allows you to focus on key elements such as people, processes, technology, and capital.

Of these elements, people are the most important. You must have the right team in place to ensure a successful sale. In other words, you must be replaceable as the owner. Will key employees stay with the business? Are customers loyal to the owner or the brand? Evaluating whether your business can operate successfully without your direct involvement is crucial.

Processes play a vital role as well, including obtaining goods, managing operations, and improving profits and sales. It’s important for these processes to be functional, predictable, and capable of withstanding challenging times such as the COVID-19 pandemic.

Technology is another crucial aspect. Does your company have IT/SEO expertise to fix any issues that may arise and maximize your technology functions?

Lastly, investors and buyers are interested in capital from the purchase, as well as the potential to generate capital after the sale. A broad customer base, recurring revenue, and scalability contribute to the creation of capital.

By ensuring the five P’s are in place (prior planning, people, processes, technology, and capital), you can add a sixth P—Prosperity—when you successfully sell your business with the assistance of Bravo Kilo Advisors.