If you are the owner of a business interest in a profitable small to medium sized business, your primary concern should be to realize the maximum value from that interest. To be precise, “realize maximum value” means receiving the most net cash for that interest thereby converting the value in the business interest from a high risk business ownership to a personal asset held at a relatively low investment risk. This is when the sale of a business interest is a wealth-building event.
Timing is a key component of maximum value. The longer it takes to realize maximum value, the less valuable the cash proceeds will be. There is an opportunity or investment loss that should be considered, and the time value of money needs to be acknowledged.
This frames the question: what do I have to do to sell my business as soon as possible for maximum value?
The answer to that question is the strategy called Prior Diligence and the planning process of Dynamic Planning.
Rick Riebesell, an experienced business consultant, has outlined the Prior Diligence strategy and Dynamic Planning in a series of posts on his Substack called Owning A Business (rickriebesell.substack.com). Owning A Business features a chat where Rick answers questions from business owners.