How To Prepare Yourself To Sell Your Business
What do you want to achieve?
POSTED BY JONATHAN VOWLES ON 24/04/2018 @ 8:00AM
Selling a business can be a wrench; it's your baby after all. But if you are going to sell it, you want to sell it well. What do you need to consider as you prepare to sell your business?
If you're going to sell your business, then be prepared and know what you want to achieve!
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When you sell your business what are you going to do next?
My first point might feel counterintuitive ... but bear with me. Are you going to retire properly, start a new venture, buy a yacht and sail around the world, become a philanthropist, become an angel investor?
The point here is that once you know what is next, you can work out how much money you need to do that ... and therefore the minimum amount that you need your business sale to achieve. There might also be things that you do beforehand to prepare the ground for what comes next.
What you want to sell for and what your business is worth might be quite different!
Identify if a gap exists and if so, what you can do to resolve this. Quite often, you can do things to your business in the run-up to a sale that enhances its value. If you are working towards a business sale, then three years beforehand isn't too soon!
In fact, the best advice is to operate your business as if you are permanently readying it to sell to someone else, on the grounds that if it is good enough for someone to buy, then it is also good enough for you to keep.
Of course, the next questions is 'how to enhance the value of your business'?
Every business is different, and so the details will vary for each business, but some general points apply to all businesses.
Businesses with a middle management team are more sellable than ones without.
Businesses with a reliance on a top customer, top supplier or top employee are less attractive to buyers.
Businesses with systems and processes are more attractive to buyers.
Businesses with higher profit margins are more attractive.
You may well have noticed that those things that make a business more attractive are reasonably obvious. You can probably review your business and self-audit it to work out the areas that you need to work on. But, like a lot of things in business, it is rarely as simple as it looks.
This is where a business adviser can make a positive difference. Firstly, in helping you to see your business as others see it and secondly, in identifying the areas to work on.
More usefully, a good business adviser will be able to help you work on improving your business. Making it more attractive and achieving a higher price for you.
"Would you like to know more?"
If you would like our help in reviewing your business, then call me on 01234 752 566 or click here to ping me an email and let's see how I can help you.
Until next time ...
More about Jonathan Vowles ...
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas, which can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.
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