The better shape your business is in, the more likely you are to sell it quickly for a premium price. Some of the simplest steps you can take are the most effective – getting your paperwork in shape, for instance – whereas others may take a little more planning. Take a long, hard look at every aspect of your business and start taking action to maximise its value right away.
Look to the Future
Excluding physical assets, the value of your business is tied up in lots of intangibles such as your brand, staff, customer list and financial performance. While your buyer will take all these things into account when deciding to buy (or not), they’re only interested in past performance as a predictor of future performance.
It can be an unreliable indicator, though, so buyers are more likely to look at prospects and will pay more for businesses whose future is underpinned by long-term contracts and recurring revenue streams. So give this area your best attention and make sure your business’s future looks bright.
If your staff are valuable, loyal and willing to transition to work under a new owner, they’ll be an asset to the sale. Your buyer will realise that employees are free to up and leave – mostly with just a month’s notice – but if he or she can see they’re valued, motivated and of long-standing service, they’ll definitely add to the cachet and make transitioning the business easier all round.
Ironically, the one person your company should be able to do without is you! Buyers shy away from businesses that are too heavily dependent on owner-managers for fear that once they leave, the business will shrink in on itself. Start planning for your absence by empowering a management team or demonstrating that systems are in place so that day-to-day operations don’t need your constant attention.
The Complete Package
Don’t rely on attracting a buyer on the strength of your client list alone. It’s only a valuable commodity if it’s cheaper for your client to acquire your clients by negotiating for your business rather than by investing in developing a competing business. The real value of your business is in the sum of its parts – the brand, the product or service proposition, the location, the infrastructure, the knowledge base, the client list and the profitability.
Make sure you outline the full extent of your business package to your buyer so they understand where its value lies, and make it easy for your buyer to imagine themselves smoothly transitioning into your position, ready to take your success to the next level.
Spit and Polish
Dedicate some time and effort to getting every aspect of your business into tip-top shape and it’ll pay you back in spades when you come to sell. Be honest about its strengths – and weaknesses – make sure all your paperwork is in order and you’ll feel confident not only about bringing your business to market but about seeing it through to completion.