Your Ready To Sell--but is Your Business?
Proper preparation for the sale of your business is one of
the most important things you can do.
If you were selling your car, you'd probably vacuum the inside
and wash and polish the outside in the hope of selling it
faster, or getting a few hundred dollars more-or both. In a
competitive business sales environment and a world of ever more
savvy buyers, it's more important than ever that you put a
little "polish" on your business as well when it's time to sell.
Start by putting yourself in the shoes of a potential buyer and
ask yourself, "What can I do to make this business more
attractive?" You, the seller, are an important part in the
overall marketing plan, and your role starts with cleaning up
your business-both physically and financially. Remember, as a
seller of a business, you are now a retailer in the business for
sale market, and the buyer is your customer!!!
If you focus on the areas listed below, the chance of selling
your business and getting the price you want will go up
substantially.
Financial Records A buyer has to understand the financial
past and future potential of your company. This means you need
to have up-to-date financial statements-income statement and
balance sheet-on a monthly basis. They should clearly and
accurately reflect the operations of the business. Try to
minimize "extra" expenses and be sure all of your revenue is
reflected. Consider having a bookkeeping service prepare your
financial statements-it increases the quality of your
information and the confidence buyers will have in that
information.
Physical Appearance First impressions count. Whether you
run a high end retail store or an equipment rental yard, your
facility needs to be clean and organized. Get rid of excessive
clutter and old inventory. Make sure any signs are professional
(not hand written!). Touch up paint, replace old carpets,
replace broken glass, repair broken fixtures. Remember-you're
trying to tap a buyer's emotions with dreams of achieving their
goals of owning and running their own business. A great bottom
line can lose a lot of value if everything else doesn't stack
up.
Operations Evaluate your operations in light of the best
way to run your business. Is there a point of sale system you
always wanted but never purchased? Now might be the time if it
will improve the ability to run the business and help your
business appear up-to-date rather than over the hill. Be sure
your employees are trained, have clean uniforms, etc. Document
some of your basic procedures in a manual. This will create a
sense of comfort for a buyer by helping them believe they can
successfully run their new business.
Price & Terms Realistic value expectations and
flexibility with regard to the terms you are willing to accept
helps prepare you for assessing offers and negotiating with
buyers. A business valuation will help you achieve a successful
sell by helping you understand exactly what it is you have to
sell.
Prepare your business for sale ahead of time by paying attention
to all aspects of the operation, and you'll be happy with the
results. Evaluate your business from the perspective of a
prospective buyer--and deliver a quality lifestyle with your
business in addition to profits. Seek a value that is justified
for the opportunity your business represents, but be realistic
in your expectations, or you'll be sitting on it a year from now
without achieving your goal of a successful exit.