The economy is solid and growing right now, and if you have been thinking about selling your business, this is a great time to put it on the market. Business sales have been strong during the past few years, and the current market should make you optimistic. So selling a business, even in a strong market, is not an easy process. There are a lot of variables that go into a successful transaction, and you need to take steps to help your business stand out from the competition.
There are some similarities between selling a business and selling a home. Although a business sale is much more complicated, many of the same principles apply. Just as you would want to stage your home to attract more qualified buyers, you will want to do the same thing with your business.
There are several things you should do to stage your business to sell for top dollar; here are five of the most important:
Get Started Early: Selling a business is a complex process, and there are a lot of things you need to do to make your business presentable for qualified prospects. It takes time to get organized and to get all your ducks in a row. If possible, it is best to begin preparing your exit strategy up to a year in advance. This will give you adequate time to mentally prepare for the sale, and to complete all of the important pre-sale steps. Of course, there are times when you need to sell more quickly, and you will not have as much lead-time. Whatever the circumstance, however, try to give yourself at least a few months to get everything ready.
Streamline your Business Processes: Business buyers want to be able to walk into a turnkey operation. In other words, they want to be able to have a smooth-running business from day one. Carefully examine your systems and processes and identify ways to streamline your operations and make them as easy as possible for the new owner to take over. Some businesses rely too heavily on the owner to stay functional. When you are preparing to sell, it is important to make your role more limited and transition as much of the operation as possible to your managers and employees.
Along these same lines, look for any technology upgrades you may need to make that you can fit within your budget. Your business should have the most up-to-date technology to stay competitive in your marketplace.
Grow your Customer Base: Buyers always want to walk into a business that is growing and not dying. But as we all know, putting a business on an upward trajectory is much easier said than done. The best way to position your business to grow is to explore new and creative ways to attract new customers/clients. For example, are you getting the most out of your digital marketing efforts? Do you have an attractive website that is geared toward bringing in clients? Do you have a strong social media presence? Look for some areas where you can more effectively market your products/services to your targeted customers.
Get your Finances in Order: Any serious buyer is going to perform thorough due diligence. Prepare for numerous questions about the financial condition of the business and be ready to give detailed answers to prospects who have moved far enough along in the process to warrant receiving this type of information. Compile organized financial statements, tax returns, and other important records from at least the past three years, and review all of this information with your CPA to ensure that everything is in order.
Obtain Professional Guidance: Trying to sell a business on your own can almost be a full-time job itself. In addition to getting everything organized to properly stage your business for sale, you need to think about listing the business, interviewing and vetting prospective buyers, maintaining confidentiality so that employees and customers do not get wind of the sale until the appropriate time, and many other important tasks.
To put your business in the best possible position to attract a buyer who will pay what it is worth, it is best to work with a reputable business broker. Business brokers are professionals, who handle numerous transactions like these, and they know the ins and outs of the process, the pitfalls you need to avoid, and the steps you need to take to ensure a smooth and seamless transaction.