Hi, your question is right up my alley...I'm a business growth and business valuation expert. I often position clients to exit their businesses for a variety of reasons. Please allow me to give you some simple, informative tips.
Your best approach is planning...planning applied to good operational and financial performance driven by a good growth plan over the next 3-5 years leading up to your sale.
Specifics are many and complex, but the formula is simple: 3-5 years from now, your future potential buyer will look at your revenue/cash flow growth (for the past 3 years) and your future projections (reasonable projections) to determine your value...at that time. You'll need to show them a great picture of the past and the future when you do!
So here's what you can do today to give create this great picture:
Do a valuation now. Be sure it includes a projected valuation for each of the next 3-5 years. This projected valuation will be based upon financial/operational projection(s). This means your future valuation is stated, provided you achieve these projections.
Projections are all about forecasting all/each department activities and the resulting company wide financial statements which reflect the financial performance of these projected activities.
In your valuation projections, be reasonable, but do some reaching at the same time. Don't over reach, but reach for reality here! Then use this projection as a financial/operational roadmap to set company targets and plans for the next 3-5 years. This means setting key, detailed marketing, sales, service and other targets that if reached, means you are achieving your plan and consequently, your future valuation. This may also mean setting events on a company calendar which support this plan. Include your company leaders in the planning if you are a collaborative leader. When complete, give the targets to your company leaders, set their expectations to meet these targets, then support them well to do it. Give them their place in the plan, their instructions, give them incentives for reaching targets if necessary, and then work the plan as a team so you can grow into the forecasted valuation. Feel free to have some alternative projections which allow you room to either fall short on some planned goals or exceed others. Be sure these alternative projections give you known valuations in advance. This will give you room for flexibility should conditions change (hint, they often do, and can be for the better!)
I hope this helps. I'm available if you need more...this can be a complex topic, so I encourage you to explore it carefully before doing it.
Rodger Stephens, CPA, CGMA
Prize Performance LLC
Business Performance Expert