We get asked this question a lot and its the main type of day to day support that we offer our selling clients as when you’ve made the decision to sell your business it’s then far too tempting to start to wind down and put your day to day operations on the back burner. But actually this is the last thing you should be doing - because to make your business as valuable as possible (and get the most return on your investment) you’ll generally need to ramp up the hard work.
Some of this work will involve getting paperwork and documents ready (see our previous blog post in relation to this point) so you have them all to hand when buyers are interested, whilst other tasks will mean ensuring your day-to-day operations continue to run smoothly.
Take the time now to look at all that you need to cover so you can achieve the highest sale value possible later.
1. See what a buyer sees
Put your buyer goggles on and take time to compile accurate financial information to show potential buyers how your business has been performing. While you’ll be rightly proud of your brand, staff and track record, your buyer will have a keen eye on future prospects and will part with more cash if they have evidence of a recurring revenue stream or ongoing customer contracts. Spend time developing this area and you’ll reap the benefits in your sale price.
2. Do your homework
Prospective purchasers will want to see that all your paperwork is in order. Apart from satisfying them that your tax records, leases, contracts and articles of incorporation are ship-shape, having everything ready also reflects well on the efficiency of your business operations.
If a business owner can show due diligence then they’re much more likely to appeal to a buyer who wants to do things by the book, and it provides reassurance at exactly the right time. So make sure your company accounts are up to date and that operational manuals and HR policies are current.
3. Spend to earn
If you think there may be some areas for improvement in your business then consider taking care of them before you market it for sale.
It may feel counter-intuitive to splash the cash on upgrading your computer systems, updating your premises or upshifting your marketing efforts but a modest spend at this stage may seem like a wise investment if it gets you a better sale price – and keener buyers.
So please do set aside some time and effort to getting every aspect of your business just so and it could pay off handsomely when you come to sell.
4. Keep your sale as quiet as possible
Only share your sale plans with key stakeholders in your business - and even then only when necessary. You could consider sharing your sale plans with your key staff and external consultants but only if they agree to sign a non-disclosure or confidentiality agreement. If word of your sale was to get out then you could potentially jeopardize the sale value of your business as the news creates uncertainty.
5. Get your staff on side
If you employ staff and feel they’re a real asset to the business your prospective purchaser will too. Naturally your employees aren’t tied to the company indefinitely but if a buyer can see they’re committed, happy and valued, they’ll not only add value to your proposition, but will make the transition easier, too.
On the other hand, a business that’s too reliant on its owner will put off buyers as they fear a business will suffer if its lynchpin leaves. Make it clear that the business can operate without your attention and empower your management team to lead in your absence.