Selling your business – where to start

Selling your business can be an overwhelming thought

This is all new!  You’ve put in the hard graft of building and growing your business – invested your time, thought and energy into nurturing your customer base, maintained profits and formed a strong and reliable team.  That’s solid groundwork – you’re an expert in that!

But now you have reached the stage where shifting priorities, lifestyle changes, or a desire to retire are making you think about selling your business.

Getting maximum value for your Business

You’ll want to do justice to all of the effort involved in shaping and refining your business, so it makes sense for you to try and achieve a premium price. This requires you to convince a potential buyer to see the value of your business as you do.

According to Rob Goddard, Founder and Managing Director of Evolution CBS, this is a process which takes preparation.  His advice to business owners who are thinking of selling to ‘start preparing early – at least 12 months ahead’.

To get the very most for your business, work on the following key areas:

Improve the financials

This may seem to be an obvious piece of advice, but it is surprising how many businesses fail to consider this fundamental aspect to a business sale. Getting your financial house in order is essential, as your finances represent an objective picture of your business.

It is easy to talk your business up in regard to profitability, winning high profile contracts and generating healthy revenue, however, if these claims are not borne out in your financials, you’ll business will lack credibility. Sound financial records are key, so ensure that all of your bookkeeping is up to date and necessary reports in place.

Improving cashflow in the business is one of the most important aspects to presenting a solid financial record. This is best achieved over a period of time, to reflect that the business is run on the basis of sound financial management principles.

In addition it is worth implementing a system of regularly monitoring revenue breakdown, which will offer a clearer picture on recurring revenue, breakdown by customer and breakdown by product or service.

View your business from the buyers’ perspective

Viewing your business through the eyes of potential buyers is a valuable exercise, enabling you to detach emotionally from your business and see it in an objective light. Remember that the main motivation of a potential buyer will be rooted in whether your business is a good fit with their future interests.

Your business may possess technology, industry knowhow or a niche clientele which complements their interests. Presenting your business as unique in a crowded and competitive market will help persuade a potential buyer to offer an optimum purchase price.

Examine your business in terms of what makes your business stand apart from its competitors. Factors such as IP, particular client relationships and specialist distribution channels present opportunities to create an impactful business story.

Get as much advice as you can

Whether you are seeking professional guidance from business sales advisers, solicitors or accountants, it is important for you to start getting advice well in advance of the sale. The aim here is to build a relationship with your advisor, as opposed to engaging with them at the last minute.

Selecting the right adviser is critical to ensuring that you maximise the value of your business and you should make your choice through a thorough assessment of the available options.

Use a vetting process to gain as much advice as possible and to gain a wider understanding of what potential buyers look for and how they are likely to view your business.  Don’t be tempted to go for the advisor that gives you the highest valuation – make sure you understand how that valuation is substantiated. At the end of the day, the market will decide what your business is worth so it’s important that you and your adviser understands clearly what makes your business stand out from similar businesses for sale.

Take time to gauge mutual rapport with your adviser, their expertise, and their ability to identify areas where you can grow the value in your business.

Deciding to sell the business that you have cultivated and grown is bound to be an intense process, however, with preparation, an objective view of your business and some great advice, the process can be a valuable experience – in every sense.

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