The business owner of this longtime business had inherited the business from his father and he had kept the business much like his dad ran the business. Realizing he was going to want to retire soon, he contacted Murphy Business to review his information and determine an exit plan for him.
While preparing his business enhancement plan for him, we discovered that the business was operating at around $2M in sales but only about $100k in net profit. Industry figures suggested it should around $400k of net profit. The business was operating at 1/4 of the expected profit. Further analysis showed his cost of goods was over 70%. This business needed help.
The business was operating much like it had when his father owned the business. Because the business had not kept up with the times, there were several areas where inefficiencies and duplicate efforts were costing the business owner money. Sadly, the business owner, who did not know any different, was not aware of the inefficiencies.
The business owner is now actively implementing the Business Enhancement Plan and expects in the next 2-3 years to get up to industry numbers.
Bringing in a exit planning expert can help prepare your business to sell for the highest value by identifying critical points in the business that can be tweaked.