Putting your business on the market too early can be like launching yourself down a ski jump without being ready and well prepared.
You wouldn't go too early on a ski jump, would you?
So why would you make such a big decision to put your business on the market before you were "ready for sale"?
I am contacted often by business owners who have been approached by a potential buyer. Sometimes they've just made the decision themselves to sell the business. Often they have given it very little thought and no preparation. Selling a business is not as simple as selling a house. It is often a long and emotional journey. You need to be well prepared and understand what you are going to need to have ready, the costs involved, the team you need to have around you and be realistic about the price and the timescale.
Most times when sellers go to the market too early, they end up putting themselves under tremendous pressure scrambling to get things together for the potential buyer and the buyers team. Suddenly everyone wants every thing NOW! The seller rushes things, makes mistake, gets stressed and emotional and can end up at the bottom of the ski jump in a bit of a mess. Once you launch yourself down that ski jump, the momentum builds and becomes unstoppable. It can be a disaster waiting to happen.
IT DOESN'T HAVE TO BE LIKE THAT
Remember the 7 'P's - prior preparation and planning prevents pretty poor performance! When selling your business start thinking and planning very early. It can take many months and sometimes two or three years to really prepare the business AND the owner, for a sale.
Here is a list of some of the things you need to prepare before you try to sell your business.
- At least 3 years 'accountant finalised' profit and loss statements
- A recent Year To Date profit and loss report
- Current depreciation schedule
- Up to date plant and equipment and asset list
- Legal information such as leases, licenses, registrations etc.
- A business profile or information memorandum
- Documented operations, systems and processes
- Human resource information and employment contracts
- Supplier agreements
- Client lists and associated information
There is much more than this but hopefully this will give you a good idea of the amount of preparation you need to do BEFORE going to the market. The last thing you want is to spend months (or years) getting a buyer to the point of due diligence and then having the whole deal fall over because something was missed in the preparation.
Spend the necessary time up front getting ready for sale before you go to the market. My work with a business owner includes:
- an in depth analysis of the business - financial and non financial
- research the likely range in which the business could get offers
- develop a plan with the owner to increase the value and saleability
- educate and prepare the owner for the sale process
The result is you will get a better price for your business and have a stress free and smooth sale process.Tips - Turn Your Business Into A Saleable Asset and Increase The Value