Knowing when to act and when not to act is a key component in all important decisions. Likewise, knowing when to keep your business and when to sell it can make a significant difference in the success of your exit and your future financial security. Take the following test and review your answers with your advisor from Allen Business Advisors. This test will help you determine if you are ready.
- Have you had your business valued by an independent, knowledgeable third-party? ______ Yes ______ No
- Have you worked with a financial planner to determined how much money you will need annually, before taxes to live in your desired life style? ______ Yes ______ No
- Are you able to vacation for two, consecutive weeks without contacting the office? ______ Yes ______ No
- Do you have a plan for your next phase of life? ______ Yes ______ No
- Do you any of your customers comprise over 10% of your gross sales or do your top five customer account for more than 30% of your gross sales? ______ Yes ______ No
- Have you determined how you wish to exit your business (sale to a third-party, sale to a key employee / partner, liquidate)? ______ Yes ______ No
- Do you know how much you will net from the sale of your business after taxes, paying off debt and transaction costs? ______ Yes ______ No
- Do you have a job description of each of your key employees? ______ Yes ______ No
- Do you have a policy and procedure manual? ______ Yes ______ No
- Have you chosen a date you will to retire? ______ Yes ______ No
- Over the past five years, what is the trend of your sales and profit? ______ Increasing ______ Decreasing ______ Flat
- How is your health? ______ Excellent _____ Average with typical aches and pains ______ Some major issues
- What is your energy level? ______ High, still passionate ______ Not excited, feel like a caretaker ______ Burned out,
- What is the industry outlook? ______ Growing ______ Contracting ______ Mature
- What is the primary source of new business for your company?
______ You are the primary or only sales person
______ Word of mouth
______Advertising / Direct mail
______ Sale team /employees
______ Internet / social media
This is a diagnostic tool to help you understand your preparation for exiting your business. There are many factors beyond these that should be considered such as family needs, the economy, and future economic outlook.
The lower your score, the more likely it is that you are ready to sell. The higher the score the more likely it is that you should start doing some exit and succession planning.
Questions 1 to 10: “Yes” answers are worth one point (1). “No” answers are worth two points.
Questions 11 to 14: First option is worth one (1) point. Options 2 is worth two (2) points. Options 3 is worth three (3) points.
Question 15: Option one and two are worth one (1) point. Option three is worth two (2) points.
Lowest Possible Score: 15 points
Highest Possible Score: 34 points
Your Score _____________
We are former Commercial Loan Offers who understand the need and importance of pre-sale planning for businesses selling in the near term and Exit and Succession Planning for businesses selling in the medium to distant future. We are the business broker for architects, engineers, healthcare practitioners and providers of business services.
1309 Beacon St., Suite 300
Brookline, MA 02445
6701 Democracy Plaza Blvd
Bethesda, MD 20817