7 Tips to Prepare your Business for Sale
After much umming and ahhing you’ve finally come to the decision that you’re ready to put your business on the market. With many aspects to consider, it should come as no surprise that it can take months, even years, to plan your exit strategy. This can all seem a little overwhelming to say the least, however following these simple steps to prepare your business for sale will help keep your head above water and hopefully make the process as stress-free as possible.
Author: Miss Chloe Byrne
1. Know your objectives
Ask yourself what you’d like to achieve from the sale; this may be to secure the highest price or quickest sale possible. Once you’re aware of this, be sure to make your aims clear to your designated consultant and account manager so they can guide the sales process with this in mind.
2. Value the business
A professional and accurate valuation is perhaps the most important thing to obtain to get the ball rolling. At Intelligent Business Transfer, our business consultants are trained to evaluate your assets and financials in order to calculate a realistic asking price, leaving you with clear expectations of the business sale outcome. To arrange a free valuation with one of our Regional Business Directors, click here or call 0800 612 7718.
3. Don’t neglect the business
Put yourself in the shoes of its new owner. Would you want to take over the business once it has been put on the back burner and is potentially depreciating? Consider how shunning your daily duties could impact the company’s capital value and saleability and how this could appear to potential buyers. Ultimately, you are doing your business a disservice and unravelling all the time and hard work you and your staff have dedicated to its everyday operation. That being said, it’s easy to overcompensate for this. Try to detangle yourself from the business so you don’t go back on your decision to sell by delegating your duties to relevant team members and reducing your hours.
4. Get your accounts in order
One of the first things interested parties want to know is how much income your business is generating. Once on board with Intelligent, our sales team will request the last 3 years of your accounts to get a concise picture of the business’s financial position. Knowing your numbers back to front and presenting paperwork such as client contracts, leases and EPCs are all key components in giving potential buyers confidence in the legitimacy of your business, as well as your reliability as a seller.
5. Spruce up your premises
For your business to have the best chance of selling at its determined asking price, now more than ever, it is essential your premises is in a presentable condition. A clean and tidy property won’t affect your valuation, but if unkept, could quickly deter buyers from booking a viewing or even making an enquiry. Replacing or restoring aging equipment, giving the walls a lick of paint, or even popping a few plants in the corner may seem frivolous, but these small touches could make a world of difference to a buyer’s enthusiasm towards the business.
6. Review your systems and processes
If you’ve been directing the business for as long as you can remember, it can be easy to forget that some of your systems and processes may now be outdated. To showcase your business as a manageable venture that runs like clockwork, streamline your processes and introduce modern methods such as for invoicing or team training. Such initiatives show the business is up to date with contemporary business practices common across its industry; a very enticing feature to potential buyers could be invaluable in enticing potential buyers.
7. Due diligence
All buyers will conduct research and perform due diligence on you as a seller. This could range from a simple financial questionnaire to a full-blown interrogation, so it’s essential that you do your homework and make sure you are up to scratch on every aspect of your business. This includes financial projections, your competitors and the state of the current market. Having credible explanations for any shortcuts you took in the past will also help to reassure a buyer and rid them of any doubt. This requires a large investment of time, but it will be worthwhile if faced with a fierce negotiator.
If you are committed to the sale of your business, ensure you plan ahead and take the necessary steps to get the best deal you can, not only for yourself, but for any prospective new owner wishing to follow in your footsteps.