A business ready for sale is well worth keeping!
I’m going to give you three reasons, in addition to the one above, why you should be getting your business ready for sale all the time — plus three tips on how to get started on that process right now.
Some years ago, I had a leadership management training business and at the seven year point, I decided it was time to think about exiting. I merged my business with another business of similar type and size and together with the owner, we became business partners with the goal of “exit with equity in three years”. Towards the end of the three years, we came up with a value for the business ourselves. We put it on the market and, having come from sales backgrounds, we tried to sell the business ourselves. After a six-month emotional rollercoaster, which was not very pleasant at all, we failed to sell the business.
I told this whole sorry story to a good friend of mine who had bought, built and sold a lot of businesses, and he referred us to his recommended business broker. The broker told us selling a business is a process and you need to be ready and stick to the process. He also added, “You need to get the price right — and by the way, you’ve priced your business too cheaply.” Consequently, we put the price up 25%, went through the process, sold the business and got the full value for it. We happily paid the broker’s fee!
As a result of going through that process, I realised how little most business owners know about putting a value on their business, how to have it ready for sale, and what is involved in the sale process. As I was starting up a coaching business, I decided to use this experience to niche my services. Shortly after the sale, the broker who sold our business offered me training and a job as a broker with their firm. Over the next twelve years as a business broker, I sold many different types and sizes of business — experience which I now use with all my clients.
Three good reasons to have your business ready for sale
Know that your business is saleable. You don’t want to reach the point where you have to sell — or someone comes along wanting to buy — only to find out it’s not saleable. So be working on it all the time.
You need to know how businesses are valued and what yours is roughly worth all the time, so you can work on increasing the value — and so you don’t try to sell it too cheaply.
A business that’s ready for sale is well worth keeping. If your business is ready for sale, you have the option to keep it forever or sell it tomorrow.
Three tips to get started
- Get your financials up to date. They need to be clean and structured to show you, the owner, what’s happening in the business — and to show a buyer what’s happening too. They need to be up to date and ready to go.
- Get the owner out of the business as much as possible. This requires delegation and great systems. Know whether you have a business or a practice: a business is built around systems, a practice is built on an expert. A business is far more easily sold than a practice.
- Track and document everything. Know the numbers in your business — not just the financials, but everything that’s happening. Over time you’ll find out which are the most important things to know for growing the profit, so you can show a potential buyer how the business works and what a great buy it will be.
What I recommend now is that you complete my short quiz. It takes just 3 or 4 minutes and you’ll get a personalised report on the key areas of your business — highlighting what’s good and where you need to improve.
