Want to sell your business?
Then turn your business into a valuable and saleable asset that you could keep forever, or sell tomorrow.
Understand that someday you will sell your business. Either reactively or proactively. Start preparing your business and yourself, mentally and emotionally. Be prepared for the long haul when you do go to the market. It can take a long time and be a real emotional roller coaster.
So what are some of the common mistakes, or roadblocks, that come up when business owners are selling their business.
When someone is buying a business, they are buying a ‘profit stream’. Usually, their first question is: ‘How much profit is this business going to generate for me as the new owner?’
Their next question is: ‘What are the risks to that profit continuing when I am the owner?’
When you are preparing to sell your business, you need to think like a buyer. How do things appear to your buyer? Do you have everything ready to present to a prospective buyer that they will want to see?
As the seller, start by asking yourself 2 key questions:
· What is my business really about and what am I actually selling?
· Where is the value in my business?
Now these may seem like strange questions. Afterall you know you business really well, right? But look at it as a buyer would. What is the buyer getting? What's important to them?
Every buyer is unique and their priorities and reasons for buying a particular business will be different. You’ll never know when you might get an unexpected offer, so start readying your business for sale now. You need to address all areas of your business if you want to get the best price and sell your bsiness quickly and easily when the time comes.
Here are 5 common roadblocks to selling a business that always rate high with buyers. You need to address these carefully first.
1. It’s you! - The owner is often the biggest roadblock to a sale.
- What you do in the business; your skills, knowledge and expertise
- your relationships with major clients
- your relationships with suppliers and key staff members
This is a big area to work on and can take 2 or 3 years to get 'ready for sale'.
2. Declining profits - As I said earlier the buyer is buying a 'profit stream' and they want to see the numbers going UP. Remember, it is not about turnover it is about leftover - gross profit and adjusted maintainable net profit to the owner.
3. Messy financials - I still can't believe how many businesses don't keep their financials up to date and finalised. Another big area to get right.
- How are the financials structured?
- Are they clean, easy to understand and up to date?
- Are there things in there that will not go with the business?
4. Processes and systems - Aim to make your business a 'turnkey business'. Have everything that happens in the business documented. There are many areas but start with these three:
- Marketing process
- Sales process
- Delievery of service or products process
5. No future potential for growth - If the business is at it's peak with no room to grow then many buyers will walk away. Most want to buy, build and sell. Always leave something in the business for a buyer to build on.
Just these 5 areas can take a long time to get right and 'ready for sale'. That's why you need to start working on them now and don't wait until you have to sell or a buyer pops out of the woodwork and you are not prepared.
Remember, a business that's ready for sale is well worth keeping. Get all these things right and you will probably want to keep the business for ever.
Start by finding out where your business stands righ now. Attend one of my workshops, complete the free "Quick Saleability Quiz" or just schedule a no obligation chat. The key things is "Do something. Take action now!"
