Here’s what you need to know
Selling a business may seem incredibly complicated, but ultimately, it’s similar to selling anything else. In order to maximise its value and attract the right buyers, you need to get your business ready. From preparing financial documents for due diligence to developing a solid business plan going forward, here’s what you need to know.
Getting records ready
One of the most important things you’ll need to do to get your business ready is to ensure that your records are in order. You’ll want to go through any records that could be relevant to the sale, including financial statements going back several years and any important contracts, and make sure that there aren’t any gaps. This will limit any delays further down the line, and will show any potential buyers that you’re on top of things.
Hire a broker
At some point in the process, you’ll want to hire a business broker such as Dexterity Partners. They’ll be able to help you get your business ready for sale, and then leverage their network to ensure that your business is exposed to the right kinds of buyers. Not only can a good broker minimise how long the sale takes, but they can also ensure that you receive the best price possible.
Streamline your operations
You’ll want to optimise your business structure before selling it, by streamlining as many operations as possible. This doesn’t mean being ruthless with existing structures, it simply means trimming off any excess fat that isn’t functionally necessary. The buyer will likely make a lot of changes anyway, so it’s important that you’re not sentimental at this stage.
Demonstrate growth potential
To illustrate that your business hasn’t reached its full potential, you’ll want to come up with a plan for ongoing growth, and then consider showing that the plan is fully actionable. Whether that’s expanding the customer base or sourcing stock at a lower cost, it’s a great way of proving that your business is an attractive asset as a whole.
Show strong customer relations
Potential buyers will often want to be shown that as part of the sale, they’ll be able to benefit from a substantial, loyal customer base. While this can be very difficult to prove, it’s worth gathering as much data that you do have as possible.
This includes statistics on sales, along with customer reviews and testimonials. You can also develop a core community in many cases via social media, by encouraging interaction between your customers.
Address any legal issues
Finally, you want to make sure that you sort out any legal issues before the sale. Whether it’s a fine you need to pay to HMRC or an issue related to regulatory compliance, not only could it harm your sale, but it could also leave you vulnerable to legal action from the buyer if you’re not upfront about the unresolved issue.
Exactly how you go about getting your business ready for sale will obviously differ slightly from case to case. That being said, the points listed above should apply to most businesses, and it’s imperative that they’re all taken care of in good time to ensure a successful sale.
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