Smart business owners are forward thinkers.
So, let me ask you: have you got your business’ end game mapped out?
You should.
Whether you’ve set your heart on selling your business next year, in 10 or 20 years, or have never even thought about selling, it’s essential to realise that you and your business are on a finite journey together.
Down the track, you will eventually wind up your business, sell it or pass it on to a successor.
This means that there will be an endpoint where you will eventually part ways – and you want this exit to be a profitable one.
To finish successfully, you need an end game plan.
Working towards exiting the business after so many dedicated years of running it can be a confronting idea, let alone preparing for it. However, even if you’re not considering an immediate sale, just like anything in business, preparation is the key if you want to be successful.
Looking at strategies today will help set you on the course to ensuring your business is profitable and attractive to possible buyers in the future.
As both a business owner and business coach, I understand the complexity of selling a business and I know a lot of people don’t even know where and how to start.
So, here are some strategies to lay the foundations to sell your business successfully.
How to start building the groundwork to sell your business
Although there is no one-size-fits-all concept to ensure a flawless selling process, here are my 5 recommendations for business owners:
- Develop your valuable core assets.
“Core assets” includes all elements, tangible or not, that your business owns and controls which will eventually be valuable to somebody else. Without strong core assets, building a valuable enterprise becomes more difficult. Some examples of a business’ core assets include:
- Intellectual property
- Customer contracts
- Patented processes
- Software code
- Brand
- and even culture
Developing your core assets is a crucial part of your business’ journey. It takes a huge investment – time, money and effort – to accumulate these assets, and they will become some of the most valuable selling factors of your business. So, start developing these assets today for the future.
- Come up with an exit strategy.
As the company’s CEO, your business is probably highly dependent on your knowledge and skills which are critical to its continued success. This “key employee” risk is a common issue among small to medium businesses.
Imparting this knowledge and replacing yourself with someone capable so the business can operate without you is essential when selling your business and will make your company more attractive to potential buyers.
- Optimise your business model.
In the ever-evolving market, model optimisation plays a crucial role in business because tweaking certain attributes, such as prices and costs, can result in higher profits.
To maximise your sale price, consider working on increasing the profitability of the business and improving your business model to generate better financial performance for the longer term. Being able to identify opportunities to adjust or evolve your current structure will make you stand out and buyers are more likely to be drawn to your business.
- Have your data room ready.
Selling well means having all the data available, clean and ready.
So gather all your financial statements and important documents dating back several years, organise them in one place and review them with an expert. The data accessibility of your business goes a long way toward building a potential buyer’s confidence that they are purchasing a well-managed business.
- Start building a list of potential buyers now.
Who’s your ideal customer? What about your ideal buyer?
Determine the type of investors who might be interested in acquiring your company and develop a list of a few specific businesses in each category.
This will help put yourself in each potential buyer’s shoes to understand the value your business can contribute to their company. You may even want to consider building a professional relationship with these companies so they can recognise the impact both businesses can have working together.
Is it time to start preparing your business for sale?
Always!
Readying your business for sale to achieve the best outcome is not something that can be done overnight – it takes significant time and careful preparation, which is why it’s always a smart idea to start today, even if you’re not considering selling any time soon.
Have a read of our previous blog and pay close attention to the Chairperson and Shareholder roles you need to play. This is a good way to assess if you are dedicating enough time to think about your end game.
Being proactive and planning ahead will help business owners like you get your company into great shape, should the right offer ever arrive on your doorstep.
How I can help you prepare your business for sale
Selling your business is a big deal that will greatly impact yourself and those involved in the business. So, help and guidance from an external, experienced expert can assist you in making smart decisions both today and tomorrow.
As a Business Coach and Mentor, I have sold companies and helped many business owners prepare their businesses for sale.
Whether you want help in formulating a good business exit strategy or consolidate your operations to ensure you’re on the right track, I’m here by your side.
Simply schedule an initial discovery call today with me.
Stephen O’Sullivan
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