How Do I Prepare a Business to Sell?

If you have made the decision to sell your business it isn’t as simple as just putting a sign on the front door and waiting for potential buyers to come knocking. The process of selling your business is complicated and takes ample time and due diligence. In fact, bringing your business to market too early can drive potential buyers away and alienate existing employees. Before listing your business for sale there are steps that you can take to maximize appeal, attract a wider customer base and even encourage a quick sale.

Getting Ready to Sell: Simple Steps Make a Major Impact

As a broker, one of the most commonly asked questions from business owners looking to sell is, what can I do to make sure that my business sells? Working with an experienced business broker will help you to determine if your business is ready to sell in it’s current state or whether or not there are improvements that need to be made first.

Once you’ve made the decision to sell it is a good idea to begin to preparation process as quickly as possible. In some cases it can take 1-2 years to create an attractive business listing for potential buyers. This may seem like a significant time investment but it will allow owners the opportunity to improve financial records, adjust business structures, further build a customer base and carry-out other improvements. Each of these improvements will showcase a more profitable business and more attractive investment opportunity for buyers.

• Create a Seamless Transition: For potential buyers taking over an existing business, a smooth transition process is key to maintaining revenue, ensuring that profits don’t drop and customers stay happy. By offering thorough and established transition plan sellers are able to showcase just how smooth the process can be, making it more enticing.

• Maximize Profitability: All business owners put focus on profitability but before a sale it becomes more important than ever. One way to maximize profitability is by cutting costs wherever possible (without sacrificing product quality or customer service), utilizing new and exciting marketing techniques to bring in new client bases. Renewing existing contracts with current vendors is a great way to demonstrate a guarantee of long-term stability.

• Update All Records: Potential buyers won’t give businesses a second look if all of their reporting is not up to date and accurate. By updating records before a sale you are providing the most accurate portage of your business possible. By compiling accurate and current data and documentation involving financial statements, cash flow, tax receipts and filings, along with anything else revolving around income and expenses, potential buyers are more at ease knowing that they are making informed decisions.

• Solidify Strong Brand Awareness: The best way to build a brand is to have a reputation for high quality products and customer service. For many buyers, the first impression that they get of a business is based on internet searches, websites and even social media profiles. Have an expert review your website and online presence to ensure that you are making the best possible impression. In fact, when properly developed digital assets can act as selling features.

• Identify Key Employees: No one knows your business better than the employees that keep it running on a day-to-day basis. While it is important not to cause a panic by advertising that a business is for sale, it is also important to create a retention plan for key players in your brand. Make sure that there are staff members that are able to fill your role when you leave.

• Showcase Your Alternative Assets: When managing a business not all assets revolve around revenue alone. Consider all of the things that add value to your daily operations. Some of these include training and operation materials, customer bases, equipment, technology, digital and marketing assets, contracts, property or real estate (if applicable) and more.

• Identify Liabilities & Mitigate Risk: Review any existing issues that may appear as liabilities to potential buyers. These can include everything from outstanding invoices to vendors, tax bills, lawsuits, liability claims and any other legal disputes that are underway or developing.

• Build a Team: The best thing that you can do for your business is to build a strong team of professionals to help guide you through the process before, during and even after the sale. A business broker will not only help to guide you through the preparation and listing process, they will connect their clients with other key players including lawyers and accountants that specialize in commercial sales.

Whether you are a small business owner or are operating a large-scale business it is important to enlist a a seasoned professional when selling your business. An expert in commercial sales will help you navigate the sales process at every stage for a smoother and less stressful transaction, so give me a call today!