Your business is worth nothing…..
Wilsons Business Brokers
Unless the business is “prepared” for a sale, including having transparent profitable financial data, then often all the value in the business is going to be hidden from everyone except the current owner. Buyers are looking at business with the most value “bang for their buck”.
The decision to contact a broker and sell your business is often made on impulse and often too late. It may have been in the back your mind for a while but not acted upon.
An experienced business broker will work closely with you and should always consider if selling now is truly the best decision. It may be that your business just needs some refocus or clarity, or even some help with Strategy.
If you proceed to sell your business, it needs to be backed up by preparation and well executed strategies to improve and clearly show the true value of your business.
The financial statements are as close as we can get to a true performance indicator of a business. If you’re showing numbers that are poor, despite having valid reasons, many prospective buyers will get turned off immediately and think you are selling simply because the business does not make any money.
Key tips :
1. Cut costs – show profit. Remember that banks and accountants will all be reviewing the information to advise their client.
Financials must show the business is viable.
2. Reach out to a business broker or business coach or accountant.
Brokers and Business Coaches see good and bad business practices as part of their daily life and can pick some easy wins and share best practice. Listen to them and work to get your business in its best possible shape before you hit the market.
3. Focus on key strategic wins, during the 3/6/12 months prior to listing the business. Get external advice, set yourself a time frame, set an aggressive plan and work hard to give your business a strong push to get it in tip top shape.
4. Where is the real value in your business? Each potential buyer may see different things: Your client list, your trademarks or your location. Whatever it is, identify where buyers may see value and protect it including important employees, have a plan B if one of them leaves unexpectedly.
5. Keep up with industry or market trends - Check successful trends, see what your competitors are doing and spend time with your clients to really understand what works well and what you could do better.
6. Understand the sales process is time consuming and risky – be careful who you share your information with - Brokers can also help in this regard. Select a broker that has expertise in advertising your business for sale but still being discreet. Set a realistic price and have a defined process to weed out tyre kickers. You need to maintain the impact of having a new listing for sale avoid listing high to start with and reducing your price as this could be perceived by the market as a business in trouble.
Hopefully these tips will help you become better prepared and in the best position possible to sell your business for the best possible price.