Selling and buying a business is complex and takes time, so as a seller the best thing you can do to ensure you achieve your ideal price is to prepare as thoroughly as possible over a number of years before taking the plunge. Buyers will scrutinise every aspect of your business, seeking any flaw that could reduce the worth of your company and get them a better deal. However, by preparing thoroughly you can give yourself time to address any issues or offset them by encouraging growth elsewhere.
Although the market is likely to shift in the years it takes for you to prepare for the sale of your business, such approaches should not be discounted even if you feel as though you might achieve a better price by selling quickly. However, when the market is poor or you feel you're willing to wait for the right price, a long and carefully planned sales process could give you the outcome you've always wanted. We've taken a look at some of the main factors you should focus on when embracing the long-term preparation of a business sale.
Getting things together
One of the main benefits of a long-term approach to sales is that you have time to get all your records together, including asset, staff, and financial records. It won't be long into the sales process before your buyer will start their due diligence, and they will typically look back over at least three years of financial records to establish the viability of your company.
This means you need to have clean, organised books if you are to attract the best buyers, and if this hasn't been a consideration previously you'll need to allow yourself the time to create a number of years worth of attractive records. You can also take the time to create accurate records elsewhere in your business, such as for your assets, so you can demonstrate that you're a trustworthy and diligent business owner.
Boost your reputation
You may be happy with the client list or customer base you have, and if you're looking to sell it may feel like a waste of your energy and money to invest in increasing this. However, if you spend the years ahead of your sale enhancing your customer portfolio you could find that your business becomes extremely attractive to the potential buyers who will be taking it forward.
Social media is a great place to start. By building a strong following of relevant potential customers, could instantly demonstrate to potential buyers that they have easy access to a wide audience who have actively chosen to engage with the company. It may take years to build up your following, but it could lead to a great result when your buyer finally signs on the dotted line.
Invest in your staff
As with your customer base, it may feel counter-intuitive to invest in the staff you may not be managing for long, but investment now could mean a better price when you come to sell. Whether you choose to boost training, provide flexible working opportunities, increase investment in perks or all of the above, encouraging your staff to stay with you will pay off in the long term.
By spending a number of years investing in your staff and keeping them on board, you can not only ensure that your business is running as successfully as possible but also demonstrate that you are a good boss who is likely to be selling a good business. After all, your staff wouldn't want to stay unless they felt that they and the business were being taken seriously.
In no business situation is planning ahead a disadvantageous practise, and will only yield positive results in comparison to what may follow rash, poorly-considered decisions. In the case of boosting your business valuation when it comes to a sale, proper investment, honing a reputation and cleaning up your books over a prolonged period of time is bound to improve the quality and attractiveness of your business, and will reap strong financial results when the time comes to change hands.