How to Prepare Your Business for Sale

How To Prepare Your Business For Sale

The key to the successful sale of a business is to think ahead, and the more time you allow for that thought process, the better the outcome will be. Planning ahead is paramount to not only selling your business more quickly and more easily than would otherwise be the case, but it also enables you to sell it for more money. The forward planning can be broken down into five basic steps.

Presentation

Anyone who comes to look over your business will be guided by their first impressions. This applies just as much to the physical things that the prospective buyer will see, such as buildings and equipment, as it does to the documentation that shows the financial health of your business.
While nobody will insist on pristine new buildings and equipment, they will expect everything to be in a good state of repair. Similarly, when it comes to records, make sure that they’re all up to date and easy to understand. As for any legal problems and outstanding debts, they should be either settled or on their way to settlement, and brought to the attention of the buyer.

Clean Up the Books & Records

Having got everything in order, the next step is to give your business profits an extra shine. This could involve refocusing from long-term growth to short-term profits in order to boost turnover, or placing a special emphasis upon the strategies and plans you have in place to ensure a profitable future.
It may be necessary to consult your accountants or a business broker before deciding which option is best for you.

Valuation

While this is the all important bottom-line figure, it’s by no means easy to calculate. Try to have in mind an idea of the asking price as well as a minimum offer that you’re prepared to accept.

The advice of an expert will be very useful, as there are several different methods that can be used to determine the worth of a business. That expert may also be able to help you find a buyer and aid you with the negotiations.

Timing

The time when you sell can make a huge difference to the amount a buyer is prepared to pay, so if you aren’t pressured by deadlines, it’s well worth waiting until the right moment. All market sectors experience highs and lows, so keep track of what’s happening.

The general state of the global economy can and does have a marked effect, while an unexpected trend can catapult your product into the limelight, leading to soaring production and profits. Conversely, the market sector may have been on a high for some time and you feel it’ll dip sooner rather than later, prompting you to get out while the going’s good.

Exit strategy

It’s probable that you’ll still take an interest in the business after you’ve sold it, either because you’ve retained or bought some shares in it, or because you want the new owner to continue where you left off and take it on to new heights. Whatever the reason, it means that you must provide for the future of the business before you leave.

For example, any future successor should be trained well in advance, with information shared, and questions answered openly and honestly. Alternatively, you may also be prepared to act as a consultant after the sale, imparting tips, knowledge and expertise as required.

If so, make your intention clear, and don’t get upset if the new owner goes on to ignore your advice as he get to grips with what is now, after all, his business.

This article was contributed by BusinessesForSale.com, the market-leading directory of business opportunities from Dynamis, the online media group also behind FranchiseSales.com and PropertySales.com

For any questions regarding this article contact our Client Care Manager Sonia Chhabra at  (888) 926-9193 or email cs@justelementary.com for assistance with selecting a bank to obtain financing, lines of credit or other business loans for your business.