If all of the stars aligned for a business owner, they would sell their business when the market is hot and there is a great demand for their type of business.
The reality of the market, however, is many business owners end up having to sell when not only external factors are hurting their chances of an ultimately profitable sale, but internal factors within their business are hampering their chances at business sale success.
The economy is completely out of your control, so the best advice a business owner can take is to plan ahead for the aspects of your eventual business sale you can control. There are a number of things you can do prior to the time you need to sell that will make your business more appealing to potential buyers.
If you were looking to sell your house, you would likely make any necessary repairs and give the walls a fresh coat of paint. You can make these same kind of simple improvements to your business as well, giving you a leg-up when buyers come looking.
For example, that freezer that’s been leaking or the doorknob that keeps falling off should be repaired and replaced if necessary. Make sure that your business is clean, as the most common feedback from buyers is “the place was filthy/gross/dirty”. A fresh coat of paint, both interior and exterior is also a good idea if needed.
Another aspect that can appeal to buyers is nice-looking books. Go through your financial records, and assemble them in a way that will give a prospective buyer an easy look into the business’ finances.
The key to a successful sale is to plan your exit strategy early. Once your business is listed on the market it can take 9 months to a year to complete the sale, so planning way ahead is far better than feeling the pinch of having to sell in a short time span.
If you had to sell without preparation, chances are you won’t get top dollar for your business. You may be forced to take the first offer that rolls in, and if you haven’t made any pre-sale improvements, those things that will need to be completed by the new owner will likely affect the price your business sells for.
Are you a business owner who is thinking about the eventual sale of your business? Leave us a question or comment here and we will be happy to assist you with your pre-sale preparations.