I once heard that the difference between an entrepreneur and a serial entrepreneur is that one is serial killer. That is, he or she is constantly looking for a way to personally kill a project and move on to something different.
The excitement is in the start and quick flip, not in the long term management of the company.
In some cases, this is a very poor strategy because certain industries take time to gestate, but in many of today’s digital-driven businesses, a quick flip can be the name of the game.
Regardless of your management style, preparing for a profitable exit from your enterprise should always be at the forefront of your decisions. You won’t be around forever and while the transition can be bittersweet, it is a necessary step in the entrepreneurial lifecycle.
For successful entrepreneurs it can represent the biggest single payout of their lives.
Here are a few things to do to prepare for your company’s eventual sale. I like to call it beginning with the end in mind.
Properly Prepared Financials
Businesses which are most successful and most inviting from an outsiders perspective are those whose balance sheets and income statements accurately reflect the nature of the business and can be confidently held under the microscope of external scrutiny.
For many would-be entrepreneurs and scrappy startups, ensuring the books are in proper order from the outset can be far down the list of priorities.
Depending on the accelerated growth of your company, a business exit may be closer than you think. And it is easier to prepare and prevent than repair and repent when it comes to getting your books in order.
Here are some useful and practical tips for getting your books in order:
1. Buy accounting software and use it (if you don’t know how, outsource or get trained internally)
2. If you can afford to, hire an outsourced bookkeeper
3. Prepare quarterly financial statements (the software and the bookkeeper will help with this)
4. File your taxes in an organized timely way
You will also notice a boost in the efficiency of your business because you will fully understand the problems and symptoms that are regularly occurring, simply by knowing what is going on with your finances.
And if a buyer ever comes knocking unexpectedly, you’ll be a bit more prepared to hand over cleanly prepped business docs.