When you first started your business it may not have crossed your mind that one day you may want to sell it. If your business is profitable and has shown growth then it may be something you can consider. This will take lots of preparation and won’t just happen overnight.
If you’ve got a team of people you may have found that prospects are coming to you because of your reputation and not the reputation of the business name. This can make your business unsellable, so as you grow your team make sure clients and prospects are aware that it’s a team effort and it’s not just you who’s the face of the business.
Here’s some points to consider when preparing your business to sell…
Your Products and Services
Is what you do easily transferable to others? Is it a skill you can teach or that you’ve just acquired? Are there processes in place when it comes to manufacturing or selling your products? Look at ways to make processes more streamlined and easier to manage. Create training manuals to show how easily the work can be delegated from one person to another. The more simple you make the process the easier it will be to sell your business.
Your business name
If you choose your own name for your business name it may be worth having a rebrand years before you consider selling your business. For the same reasons as above people are buying into the person rather than the brand. Your new name needs to be well established and have gained trust and loyalty before you can considering selling up.
Is there room for growth?
If your business has reached its peak and there’s no maneuver for growth then it’s not going to be sellable. Think of ways in which your business could grow so that you can suggest ideas to the buyer and identify growth points so that they see the potential in your business.
Do you have a healthy cash flow?
No one wants to invest in a business that’s failing. A positively healthy cash flow will go a long way when it comes to selling your business. The first thing a seller will look at is your finances, so make sure they’re up to date. If your business is profitable it doesn’t necessarily mean the cash flow is healthy, you may need to seek our advice to assess your cash flow health. This is why it can take years to prepare your business to sell. A buyer will look into the history of your accounts. This is why it’s important to have a business plan and look ahead as far as 5 or 10 years time, so that you can be prepared.
Do you have a team behind you?
A business which is solely run by one person is harder to sell. The reason behind this is that it’s more work for the buyer to take on. Even if you have a team of people who you outsource to then it’s definitely better than just one person doing all the work. However, if you employ a team of people it will show that you have invested in the business, there is room for growth and the workload can be distributed.
Don’t give up
Once you’ve decided that selling your business is the way forward then don’t sit back and relax. It’s more important than ever to drive your business forward with new ideas and bring in new leads. This will prove to the buyer that your business is successful and worthy of their investment.
Don’t keep secrets
Once you’re in the position to sell it’s important that you advise your team members of your intentions. The reason behind this is that the buyer may wish to speak with members of the team before making a decision and they don’t want any nasty surprises! Keep it positive as it can be worrying for your staff members when they hear that you are selling the business. People don’t like change and they will worry about the security of their jobs.
Hire a professional
To hold you accountable and ensure you’re doing everything in your power to put the roots in place to eventually sell your business, seek professional advice. In the first instance seek a bookkeeper and or an accountant to anaylse the numbers for you to make sure you’re on the right track. They can also help you to put steps in place to increase productivity, profitability and improve your cash flow.
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