Though a business sale can take months to set up and negotiate, the actual process of preparing to successfully exit your business may take much longer.

So, if you want your sale to go as smoothly as possible or are looking to maximise your returns, it’s never too early to get your business into a shape.

Why is an exit strategy so important?

Once you specify your planned exit, all your strategic decisions about running your company will be designed to meet that purpose. And a well-crafted exit strategy will both optimise your trading profit and also increase its eventual selling price.

For those entrepreneurs who may have spent years building up their business, planning for an exit will make sure your business will continue to thrive after you leave. And this should bring a great deal of satisfaction.

But never underestimate just how long it can take to get everything in order ready to introduce your business to the market. If you want to achieve your goals, it’s a process which must be planned long in advance and involves some steps you must take at a relatively early stage.

Decide how fast you want to sell

Time will always be against you if you’re in a hurry to sell on the open market. And if you plan to sell out to family or a staff consortium, you may not receive the full cash price at the point of sale. If so, you may need to plan for a continuing strategic involvement in the business to guarantee your investment return.

However, even though the open market gives you the option of a clean break, it’s also the choice which demands the highest standard of sale preparation.

Get your financial records in good order

Buyers will want to see compelling evidence of profitable trading over time. That means not only producing reliable balance sheets which track company progress, it also involves detail such as asset valuations, debts and liabilities, as well as profit forecasts and more.

Such documentation should give any prospective buyer and their due diligence team the evidence they will need to prove the worth of your business.

The problem you may face is that any improvements you make to increase the value of your business will need to be put in place as early as possible. Otherwise, the upswing in your trading will appear in your records as a recent spike rather than a reassuring historical trend.

Make yourself redundant

A business that can’t survive without you has little inherent value. You should decide to remove yourself from running the business and empower a competent management team to do the job in your place.

Try to scale down your contact with customers and leave important decisions to others. This will help to develop a business profile where you’re no longer a key component.

Record all operational procedures

You need to document all your business processes, step by step. This will encourage prospective buyers by giving them a realistic picture of how your business can be profitably run on a day-to-day basis.

If you can include job descriptions and templates for any repetitive tasks that are core components of your success, you will make what you have to offer even more attractive.

Add value to your business

Reviewing and updating your systems and processes to reflect current trends in your industry will also impress prospective buyers. And remember that this should also include your company website, IT facilities and sector technologies.

Even though an exit strategy clearly takes time to prepare, it will contribute to your profitability as soon as it is in place. But more importantly, it will enable you to gain the sale price you deserve for all those years of hard work!

Jo Thornley is head of brand and partnerships at Dynamis.