- 21 Apr
The Hidden Treasure in Business Exit Planning
It’s a hidden value that if not acknowledged can make or break a business sale.
Too many business owners walk away from their business when they put their business on the market to sell with little more than book value.
So why is intellectual property a “hidden treasure” and is it really worth the effort.
If you put yourself in the eyes of a potential new buyer of a business just for a short time. It becomes apparent they have two priorities;
1 – Business profitable
2- Ability to administrate the business without key personnel present
The first point above is relatively easy calculated providing you have a good Business Broker. They look through your financials and calculate a figure.
The second point however is really dependent on how much effort you put to developing your business systems. Developing a formalised workable format that anyone regardless of industry experience can successfully feel they can administrate. This means without key personnel no longer in the business, including yourself as the outgoing business.
This is why businesses that are under a franchise umbrella are worth considerably more. I’m not suggesting here that all franchises are systemised completely. In fact in my experiences most franchise firms only have their franchise operations systemised not even covering their administration areas.
The key point here, regardless if you are preparing to sell now or sometime in the future, Business Intellectual Property Belongs to the Business Not Your Staff. Continuously develop your intellectual property and reap the rewards through efficiency while you own it and have the last laugh when you walk out with an over inflated sale of your business.
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