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Sacramento, CA (PRLEAK ) September 30, 2009 – According to The California Association of Business Brokers (CABB), a non-profit trade organization, the failure to have an exit strategy is the main cause for small business owners not being able to sell their business at its full potential and get the desired price. A study by Harris Interactive supports this claim, where three out of four small business owners were found to be lacking an exit strategy.
According to Ron Hottes, President of CABB and several other business brokerages, small business owners concentrate more on launching their business and promoting their products, but ignore the need for an exit strategy. Hottes stresses the need for an exit strategy which is as important as a launch or promotion of a product. He also suggests a few tips to help small business owners build an exit plan.
According to Hottes, an exit strategy should be developed well in advance, a minimum of three years prior to selling. This enables small business owners to maintain a financial report and prove their profit and growth potential to a new owner. It also gives owners the chance to streamline business operations for a potential new owner.
Small business owners need to keep a realistic selling price in mind, which needs to be determined after taking closing costs and taxes arising from the sale into account. For a better price, small business owners can also look at seller financing options. To keep all this in place, an accountant, attorney, and a certified business broker need to be involved in the team. These professionals have the ability to create exit strategies that can fetch a good price.
Hottes also makes small business owners aware of the fact that unforeseen circumstances such as death, personal injury, illness, and other financial problems can also force a premature sale of the business. Therefore, planning ahead with the support of professionals, will help business owners get the best price no matter what the circumstances are.
About CABB: Founded in 1986, California Association of Business Brokers (CABB) is a professional trade association that assists business owners in the purchase, sale, and evaluation of their businesses. The main objectives of the association are to oversee and recognize professional business brokerage firms. The association promotes awareness among business owners of the need for using licensed brokers. Members of CABB are required to adhere to the code of ethics established by the association.
According to Ron Hottes, President of CABB and several other business brokerages, small business owners concentrate more on launching their business and promoting their products, but ignore the need for an exit strategy. Hottes stresses the need for an exit strategy which is as important as a launch or promotion of a product. He also suggests a few tips to help small business owners build an exit plan.
According to Hottes, an exit strategy should be developed well in advance, a minimum of three years prior to selling. This enables small business owners to maintain a financial report and prove their profit and growth potential to a new owner. It also gives owners the chance to streamline business operations for a potential new owner.
Small business owners need to keep a realistic selling price in mind, which needs to be determined after taking closing costs and taxes arising from the sale into account. For a better price, small business owners can also look at seller financing options. To keep all this in place, an accountant, attorney, and a certified business broker need to be involved in the team. These professionals have the ability to create exit strategies that can fetch a good price.
Hottes also makes small business owners aware of the fact that unforeseen circumstances such as death, personal injury, illness, and other financial problems can also force a premature sale of the business. Therefore, planning ahead with the support of professionals, will help business owners get the best price no matter what the circumstances are.
About CABB: Founded in 1986, California Association of Business Brokers (CABB) is a professional trade association that assists business owners in the purchase, sale, and evaluation of their businesses. The main objectives of the association are to oversee and recognize professional business brokerage firms. The association promotes awareness among business owners of the need for using licensed brokers. Members of CABB are required to adhere to the code of ethics established by the association.