Best Foot Forward. How to Sell Your Business
If you’re going to sell your business for the best price possible, you should present it in the best light.
Just like stylists give houses that special something when they go on the market, there is a move towards presenting your business in the most attractive way possible when you come to sell your business. But in terms of presenting a business as an investment, there may be factors that either party can control to make a difference to the final price.
What can you actually control?
For both buyers and sellers, there are variables that are within their control and there will be some things that are outside their control. There will be macro factors that are beyond anyone’s reckoning—the state of the economy is a particularly unpredictable one.
In addition to being subject to the vagaries of the economy, some businesses are also heavily weather-dependent, and we all know how hard it is to predict how that’s going to go. For example, I know a safari business in a weather-prone part of the world and it rains throughout much of the year. The wet season really affects the business. These are big-picture factors that are obviously outside of anyone’s control when you’re attempting to sell your business.
Good bookkeeping, forward planning and a trusted handover team
Internal factors could be a consideration when wanting to sell your business. For example, as an owner, being able to let go of certain tasks and responsibilities and to delegate those to the people you’re trusting will remain with the business. On a related note, make sure you put in place a good management team. Ensure that the business has no client dependency.
It helps to put together a checklist to make sure you’ve got everything in place. Document everything, to make sure it can easily be transferred to the new business owner. Build a business plan and identify growth opportunities.
There are things that you can control as you prepare to sell your business, and these aren’t just window dressings. They’re measures that will help the team transition to the new owner, and make the business a more viable and attractive proposition to the buyer.
Know your buyer
In terms of presenting your business for sale, it’s important to consider who you’re presenting to. Understand who your target audience is going to be and who’s the likely buyer for that business. Ensure that what you are presenting to them is a value-add opportunity for them. That’s what is really going to attract their interest and encourage them to explore the opportunity to acquire your business. Know your potential buyer and package your business in a way that’s really going to speak to that buyer.
Ensure your buyer can see where it’s going to add to their business. They can see the synergies they can get and the cost savings. It also pays to make sure that all your promotion and advertising speaks to that particular buyer and that you’re reaching them.
Marketing and presentation is really important, as we’ve seen with the housing market—but presentation comes after preparation.
Be prepared, get your affairs in order well before you sell your business, and have everything ready and packaged together so you can present it to that right buyer in the right way.
Sean Wolrige, LINK
For further information about this article, contact your nearest LINK Business Broking Office.