Top 10 Tips to Prepare Your Business for Sale
1. Assess the Businesses Strengths and Weaknesses
Viewing the business through the eye of the buyer can help identify areas that may need some work before sale. This could be anything from the appearance of a business, website design to merchandise availability. Have a clean-up, repair, paint, etc; a lot of little fixes can immensely improve the look of your business.
2. Create Systems and Procedures
Written instructions for daily procedures will allow systems to be adopted by new owners. Detailing the day to day running of the business demonstrates quickly to a potential buyer the consistent standards and structure which can be easily duplicated when you leave.
3. Maximise Profitability
To enhance the value of your property you will need to start well before the sale process has started. Ensure operational efficiencies and cost reductions are enhanced. Seek ways to reduce direct and indirect costs such as minimizing waste and negotiating better prices with suppliers.
4. Booking Keeping and Accounting
Ensure accounting processes and reporting are accurate and look attractive to potential buyers. Speak to your accountant to understand the financial position of your business clearly. By organising financial records, you can also better establish a sale price that would help cover any current loans.
5. Ensure Customer/Supplier Contracts are Signed
Having established business contracts in place to continue will ensure sustainability is ensured even after you leave the business. Negotiate longer term deals with clients and suppliers.
6. Highlight your Company Culture
Not only do the books need to look attractive but company culture is another aspect someone is buying into. Showing a strong cohesive work environment can help demonstrate the goals and vision of the business.
7. Reduce Buyers Risk
Potential buyers want to see stability in a business with little risk. Understand your current business risks in detail, reduce where possible and demonstrate a clear plan that will mitigate each issue in the future. Ensure you have a clear understanding of your Lease agreement.
8. Have a Strong Leadership Team
Buyers need to see that when you leave a company the business will not fall to pieces without you. By demonstrating you have a strong management team, buyers can see the business will remain robust in the transition.
9. Set the Right Price
Working closely with your accountant to establish your current financial situation including loans, machinery, stock etc will give you a better idea of what you will need out of the sale. Seek professional advice from business brokers who have the expertise and knowledge of the current market conditions.