How to sell and get more for your business

Selling up? Unfortunately, a number of businesses won’t be attractive enough to sell, resulting in some just closing the doors. Less people, with less capital, who have little appetite for risk having to operate in tighter markets could make your business harder to sell for what you want. Your business has to stand out as a good bet – profitable, interesting and have future.

There are a number of actions you can take to get your business exit strategy right:

How it looks – make sure it looks sharp, desirable and well poised for the future.
Profitability – ensure it shows good and healthy accounts.
Cashflow – build your sales and minimise unnecessary expenses.
Systems and processes – ensure they are working well and fully documented for ease of transfer.
Unnecessary assets and dated or surplus stock – get rid of it.
Documentation – ensure all agencies, leases, licences, patents and contracts are current and in place.

POISED WITH A FUTURE

Homeowners will often makeover their houses to help them sell and get their best price. Business owners need to do likewise to maximise the value of their opportunity. Making your business look attractive, and showing that it has a future will help maximise your price and catch the attention of more potential buyers. If necessary reposition your business to show it has a future. Also clean it up, attend to maintenance and replace, fix and paint so it becomes the sort of business someone would want to buy.

THE CASHFLOW

Ensure your business accounts reflect a well-run and hopefully profitable business. The value of a business is invariably determined by its current and future profits. Buyers and lenders will look at the performance of the business over the last three years to guide them in assessing future trends and profits. Always be on the lookout for ways to increase sales and reduce your costs.

SYSTEMS AND PROCESSES

Owners are often the main source for client contacts and daily operations – with other activities being assumed by staff. Unfortunately, this only attaches the goodwill to the owner, and is a concern to potential buyers. By working through the key areas of your business, hone and document your systems and processes. These along with reducing the businesses dependence on you will assist in reducing the risk, and in transferring the goodwill with the business.

STREAMLINE

Any assets, be it plant or vehicles, which are not essential to running the business should be removed from the balance sheet. Removing these assets prior to the sale will ensure that the price being asked for the business includes only the assets essential to running it, this helps keep the asking price lower.

Review all stock on hand and clear out any dated or surplus stock, again this will help keep the asking price down.

Compile a comprehensive list of all assets and their values. This will help quantify what the business comes with.

QUANTIFY

If your systems, processes and customer lists are well documented, your contracts are in place and any leases formalised appropriately, then it is much easier to quantify and attach a value to these non-tangible assets.

Buyers want facts. Be prepared to answer everything and anything about your business. This includes balance sheets, sales, staffing, and your assets and liabilities to mention a few. If there are any issues then it pays to sort these out before listing your business for sale.

SELLING

Put an exit strategy in place so you have time to prepare your business for your best outcome. Check out the free seller resources and download a “Business Seller Checklist” to help you work through the process so you have a more saleable and valuable business.