To get anywhere in business, you need to know where you want to end up. Concentrate on your personal objectives, and your business objectives, in order to prioritise your business strategy and make sure that your business grows so it’s in a good position for you to sell at your chosen endpoint.
Most business owners keep the notion of selling their business in the back of their mind until it’s too late to make a good job of structuring and preparing it for sale. It can take at least five years to make a good job of grooming a company for sale and maximising the value of the business. By including some preparation for selling your business in your current planning, you can avoid some of the pitfalls and make your business attractive to potential buyers without having to delay your plans to sort out problems that only appear when it comes to selling your business.
What to Look at
Finance – Does the business have a good financial record? Buyers prefer a record of smoothly increasing profits with good growth potential.
Strategy – Are strong, credible plans in place with realistic strategic goals?
People – Are the basics in place to make the business attractive? Buyers like well-organised businesses with a strong management structure, and succession lined up.
Sales & Marketing – Attract strong business development people, who will stay with the business. If you’ve been the only source of new business, and you want to leave, buyers will shy away.
Processes – Is the business a streamlined operation, with simple efficient processes which will continue to operate as intended under a change of owner?
You need to look at your business through the eyes of these buyers – they will want the business solely for its asset value. Some things will undermine the sale or reduce a potential sale price, others will add a premium. Treat the money you spend on making necessary changes to boost the company’s asset value as an investment, much of which will be repaid in the increased selling price you receive in the end.
You will also need to create a strong team around you when it comes to selling your business. Your current accountant or lawyer may not have the experience you will need when dealing with the due diligence that surrounds selling a business, so take note of possible contacts and networks where and when you can.