Maximise the Value of your Business

So you’ve put in the hard graft of building and growing your business – investing your time, thought and energy into nurturing your customer base, maintaining profits and forming a strong and reliable team. Now you have reached the stage where shifting priorities, lifestyle changes, or a desire to retire are precipitating thoughts of selling your business.

In doing justice to all of the effort involved in shaping and refining your business, it makes sense for you to understand what it takes to 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, advising business owners considering a sale to ‘start preparing early – at least 12 months ahead’.

When preparing for your business sale, it is worth taking on board the following key considerations:

 

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 are liable to fall foul of credibility issues. Sound financial records are key, so ensure that solid bookkeeping records are 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 consistent 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 strategic fit with their interests.

Your business may possess technology, industry knowhow or a niche client base which complements their interests. This in itself will engage the potential buyer in offering an optimum purchase price for an offering which is unique in a crowded and competitive market.

It is therefore worthwhile to assess your business in terms of what makes your business stand apart from its competitors. Amongst others, factors such as IP, particular client relationships, 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 aspect to ensuring that you maximise the value of your business and this choice must be made through a thorough assessment of the available options.

In choosing your adviser use the vetting process to gain as much advice as possible to gain a wider understanding  of what potential buyers look for and how they are likely to view your business.

When opting for an adviser to work with, take time to gauge mutual rapport, expertise, and their ability to identify areas where you can optimise 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, objective assessment and a complementary set of advisors can help to make the process a valuable experience – in every sense.

 

Evolution Complete Business Sales regularly runs free Masterclasses, for business owners considering a sale in the next 1-3 years. To view the schedule and register, click on the following link.

http://https://evolutioncbs.co.uk//selling-a-business/seminars/

 

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