If ever there’s reward proportional to effort it is the returns that often come from pre-sale preparation and input before starting the process of selling a business.
Pre-sale preparation is a very important ingredient and should be viewed from an efficiently run business operations perspective. But it should also be viewed from what a business buyer needs to know, how the buyer’s financial advisors will view the business and what’s needed to satisfy the lenders who will finance the transaction.
The following factors are ideal for achieving a full value successful sale:
- Sales trending upward
- Solid management and staff
- Established, balanced customer base
- Favourable lease and/or location
- Good computer, accounting and reporting systems in place
- Clear business plans, policies, procedures and operations
- Profit margins meeting or exceeding industry standards
- Cash flow steady or improving
- Well trained employees and low staff turnover
- Established, growing market share
- Solid reputation for quality and service
- Products and/or services which are well established or in demand
These ingredients are vital and will be reviewed by all prospective buyers and their advisors as they compare your business to other opportunities. They should be viewed and tailored according to the type of business and industry.
Common mistakes to avoid, make a checklist and be sure you avoid the following:
- Failing to correctly prepare the business for sale
- Not knowing the business’s true value
- Failing to prepare quality information about the business
- Trying to sell to just one buyer
- Neglecting the business when it is for sale
- Not seeing the business from the buyer’s perspective
The time to review the dos and don’ts is well before you’re ready to sell. We recommend enlisting the services of an experienced business broker or advisor to plan a successful strategy. It will pay you big dividends in the future, both in terms of time to sell and value.
Call us and let Jamieson help you sell your business and benefit from our professional advice based on over 25 years experience.