It Pays to Prepare
23rd July 2020
If you fail to prepare, you prepare to fail. The same principle applies when the right time comes for you to sell your business. The role of your business brokerage is to not only facilitate the sale of business, but to also achieve the maximum value for your business. As such, our role is to advise you at every stage of the sale on the steps necessary to accomplish an optimal result once the keys are exchanged.
Contradicting common perception, the stage of the sale that can have the largest impact on the final price agreed occurs before your business is formally introduced to the market. The preparation of your business for a transition in ownership can be the difference between providing a great opportunity for a potential buyer, to providing an unmissable opportunity for a potential buyer; the latter attracting a larger multiple for your business.
A key area that is of particular pertinence to businesses is to ensure that your business is able to successfully operate without your input. Many business owners take a highly practical approach towards running their business, often providing a substantial input into the day-to-day operations, as well as being the driving force behind the companies continued growth. A potential buyer will want to be ensured that once they buy your business, they will be able to sustain its current level current revenue growth.
If the above description is parallel to your own situation, it is advisable to offer a generous handover period which will be beneficial in attracting prospective buyers if your business is highly specialised.
Another area of high importance is to ensure that your numbers are in order. Nothing will deter away a potential buyer more than being unable to grasp the exact specifications of a potential business acquisition.
In preparation for the sale of your business, we advise that you have readily prepared:
- 3 years of full accounts, a complete staff list,
- a comprehensive asset list with current market values, and
- a selection of up-to-date operation metrics such as conversion rates and weekly sales.
In the business world a number speaks more than a thousand words, and the same rings true when trying to sell your business.
Whether the potential sale of your business is imminent or still on the horizon, its pays dividends to ensure you and your business are fully prepared.