The society which scorns excellence in plumbing as a humble activity and tolerates shoddiness in philosophy as it is an exalted activity may have neither good plumbing nor good philosophy: neither its pipes nor its theories will hold water. -John W. Gardner
As a plumbing business owner, your give attention to achieving excellence in the profession has yielded great success. You adore what you do and your passion and hard work has repaid.
Your business has managed to survive and prosper in the toughest economic climates and has earned the respect of your clients, peers and employees. Your plumbing company is considered a real asset to the community with a reputation for reliability and honesty.
All of this, nevertheless , has come at a price. You’ve had to sacrifice time you might rather have spent with family or pursuing an interest or other interest. You could have postponed taking better care of your health and fitness. You may be at a point, right now where you wish to retire from the business and commence the next half of your life.
If you should be like the majority of plumbing company owners, you simply haven’t had time for you to sit down and plan for the inevitable day when you will exit your business. In fact , most owners of small and medium-sized businesses (nearly 80 %! ) admit they’ve no succession plan in position.
This fact points to a common assumption many business people make.
“My business is really profitable and amazing that it will be easy for me to locate buyers and sell it quickly. ”
Unfortunately this really is far removed from reality. Even yet in the best of times, for the top businesses, the success rate for selling in the United States is less than 3%.
That’s why, in the event that you plan on exiting your business, you ought to start putting together a plan at the least two years before you intend to leave.
Document your financials to help in valuation…
Putting together a comprehensive, comprehensive exit plan entails paying attention to some critical aspects of your business in order to attract the greatest caliber of potential buyers.
For instance , you must have fully-documented financials available that cover a minimum of five years, including the present year.
For savvy buyers, the fact of potential return on investment is what your plumbing company actually looks like on paper, and never what you as the seller believe it is worth.
While you will certainly wish to engage the services of an experienced professional who is well-versed in all the nuances of proper valuation, you do need to understand at least a few of the factors considered in a valuation.
Potential buyers will give attention to obvious things such as net gain, revenue, and cash flow as basic measures
Buyers might also consider what is known as the EBITDA, or “earnings before interest, taxes, depreciation, and amortization, ” a measure used to analyze and compare profitability between companies.
In addition to a thorough financial review, a buyer who is looking to invest in a plumbing business will consider other items before making an offer. A prospect will probably want to know details such as how many service calls you average per day and the value of those calls.
He/she will be looking beyond the books for both tangible and intangible factors which make your business more likely to produce a quick return on investment. Planning ahead will make certain you have done everything possible to produce your business an attractive option for the prospective buyer.
Your skill right now to prepare for a fantastic outcome…
The first place to start when planning a business exit is always to put together a highly-skilled, trustworthy transition team.
This team consists of experts and trusted advisors with experience in operation transitions, as well as key employees, family members, and other interested parties. In addition to your attorney and tax consultant, include a mentor from your industry who has actually gone through the sales process; someone who has been in the trenches and can assist and advise you.
Selling a business isn’t any longer effected with big money of cash and a handshake. It is a highly complex process and you need as much expertise and wisdom as you are able to gather together. Once your team has been assembled, you can meet regularly to draw up a step-by-step transition blueprint.