Preparation is important when it comes to selling your business. This article informs you how to optimize your business to sell, specifically how to assess your business, document operations, consolidate paperwork, and make your premises presentable.
In this guide, we explain the way to optimize your business to sell with minimal pain. Also, you can check out our 2 previous posts: 1. … 2. …. to better understand the whole process to optimize your business to sell.
The task can seem daunting, but there are some fairly simple things to think about as you head towards selling your business.
1. Choose a sale date
Having a date in mind for the sale of your business won’t only increase your motivation, but will also offer you a workable timescale for preparing your business for sale.
Usually, the procedure of selling your business will take a minimum of a year, while specific planning will take around six months before that.
Try to not wait until you can no longer manage the operations of your business. Buyers will often cash in on sellers who are forced to sell under difficult circumstances like their old age, illness, or financial difficulty.
2. Assess your business
This is somewhat diverse from valuing your business and you need to look at your business cautiously to analyze how it works.
Sit down for a few hours and pretend you’re one of your customers. Then use that orientation alongside your insider knowledge.
Ask yourself the following questions:
• What do you do well?
• What could you improve on?
• Who are your suppliers?
• How many products/services do you sell annually?
• Are there some special products and services that sell better than others or with greater margins?
A perfect method for evaluating your business is the SWOT analysis, focusing on:
This method provides a reasonably well-rounded check of your business and forces you to confront its weaknesses and vulnerabilities as well as its strengths and potential.
You’ve surely been analyzing your business in your own head for a long time. But if you haven’t, now is the time to put it all down on paper so that future customers can understand the business they may be buying.
3. Share your operations
It’s important to make sure that you, as the business owner, aren’t the only one who knows how things work. Obviously, you need to coach your team throughout the business’s life, but as you prepare for sale it becomes even more crucial.
This can include everything from day-to-day actions to the once a month/year actions that you handle. You probably do most of these things without thinking, but the customer will want to understand that if you’re removed from the business, your business will still function.
Create an operations manual – this will make sure that everything you and your team have in your heads is documented.
4. Consolidate the paperwork
As a business owner, you know how much documentation is needed. – From meeting minutes to financial records, legal documents, and general filing, it can be overwhelming. But, it’s vital to keep everything in good order.
It’s particularly important to possess every financial statement and accounting record from at least the past year, if not the past three years or longer.
Keeping paperwork accessible isn’t only required to prove that you have a lucrative business that’s worth buying. It’ll also work in your favor to keep the process as smooth as possible throughout.
The best way to get your business ready for sale? Always have the sale on your mind, albeit it’s not on the horizon. Stay organized and on top of everything so that you’re not overwhelmed when the day finally comes to sell up.
5. Tend to your business’s appearance
After being in business for some years, you’ll notice that your premises are looking run-down.
Just take that overtime to look at your business how a customer or a buyer would. Pay attention even to small things like the squeaky door, the broken tap in the break room, etc.
These might seem insignificant to the running of the business, but they might be the deciding factor when it comes to a new owner buying your business at the asking price.
Most of our first impressions are based on what we see, so going the additional mile and fixing up the little things doesn’t hurt when it comes to getting your business ready to sell.
It’s the same as shopping for fresh flowers when you’re trying to sell your house: it spruces the place up and makes it look the best it can.
At the end of the day, your future customer wants to be put at ease. They need to understand that they’re doing the proper thing by buying your business.
Having well-documented financials, a succession plan, looked-after premises, and a thorough assessment of your business could get a buyer over the road and result in your business selling for the price you wanted.