20 Golden Nuggets - Mitigating Risks

12. Mitigating Risks -  Contracts, Compliance, and Continuity

Every business has risks, but when you’re preparing to exit, it’s critical to address these risks upfront. Buyers will be looking for potential red flags, such as legal issues, compliance gaps, or unstable revenue streams. If you don’t mitigate these risks before entering the sale process, they could significantly reduce your business’s value or even scare off potential buyers.

Start by reviewing all contracts with customers, suppliers, and employees. Ensure they are legally sound and won’t present any issues post-sale. Compliance is another big area—check that your business is up-to-date with all regulatory requirements, from health and safety to tax obligations.

Operational continuity is equally important. Buyers will want to see that the business can run smoothly without you, so make sure processes are well-documented and there’s a clear plan for transferring knowledge and responsibilities.

Golden Nugget -  Mitigate risks by tightening contracts, ensuring compliance, and creating a plan for operational continuity. A risk-free business is far more attractive to buyers.