7 clear tips for getting your business ready to sell.
If you’re considering selling your business in the next 1-3 years, you likely have many questions. What needs to be done now, so you’re ready to sell? What roles will need to be replaced once you leave the business? What can you focus on now to ensure a seamless transition at the time of sale? To help you develop a well thought out plan, here are seven clear tips for getting your business ready to sell:
1. Start having conversations with the right people.
One of the first things you should do when you’re ready to sell your business is to seek out people who can guide you through the process. Contacting a CPA and other business owners who have successfully sold their businesses can give you insight into what to expect. Additionally, partnering with a business broker can help you sell your business as they will answer any questions you have, help determine your business's value, and guide you through the entire process.
2. Create a timeline.
It would be best if you started creating a timeline for selling your business as far in advance as possible. Planning 1-3 years before selling gives you time to build profitability and ensure that your processes and finances are documented and assigned to others within the business. Additionally, if you’re currently spending a lot of time on the day to day operations of your business, you may not have time to focus on getting your business ready to sell. Building a timeline gives you extra space to prepare.
3. Focus on building sales.
When mapping out your timeline, it’s important to focus on ways you can increase sales. Increasing sales in the months leading up to the sale of your business will show future buyers that your business has a strong potential for growth. Consider ways to diversify income streams, create a steady customer base, and start a CRM (Customer Relationship Management) system if you don’t already have one. Securing a growing group of customers who pay on time and a solid customer base with repeat purchasers will help to increase your company’s value.
4. Ensure your records are up to date and in order.
Tax returns, financial statements, income records, and sales data must be up to date and accurate. Eventually, potential businesses will want to review these documents before purchasing, and ensuring that everything is up to date will give potential buyers confidence in your company's financial health.
5. Understand your key selling points.
What makes your business unique? What are you the best at? Leaning into your strengths and shining a positive light on your company can give you a competitive advantage over other businesses looking to sell. Start by sharing customer testimonials and case studies through LinkedIn announcements and social postings online. Doing so can put your company in front of the right buyers.
6. Document procedures and day-to-day processes.
It is important to record your company’s operations, processes, and marketing details. It’s also essential to ensure that employee handbooks and manuals are complete and up to date. Documenting these items indicates to a potential buyer that a smooth hand-off after the sale is achievable. The buyer will feel confident that they can seamlessly take over the day-to-day operations of your business.
7. Prepare for viewers.
This includes both online views and in-person visits if you own a brick-and-mortar business. One of the first things a potential buyer may do is Google your business. When doing so, what will they find? Be sure to have your website up to date and well-designed. Highlight customer testimonials, special patents, and unique features so the buyer can see what makes your business special.
If you own a brick and mortar business, make sure your physical business space is set to impress potential buyers. Similar to getting a home ready for sale, you will want to finish minor renovations, add a fresh coat of paint if needed, or spruce up the outside to welcome potential buyers.
Preparing your business for sale can be a long process. But done correctly and with the proper focus, these tips can help you maximize profits and ensure a seamless transition of ownership. Thinking of selling? Contact us for a free consultation today.