Whatever the reason for selling your small business – retirement, refocusing or relocation – the best way to attract keen buyers and obtain the best price is to plan ahead.
Make sure you allow sufficient time to showcase your business to its best advantage. No-one really enjoys the idea of putting in more hours when they’re looking to move on. But get the basics right and you’ll give your business a massive sales boost.
A happy, motivated workforce is not only key to the success of your company in the short term but will also make the business more attractive to the best buyers. You should have a clearly defined management structure with written job descriptions and formal contracts. Explore what motivates staff performance and consider incorporating incentives that will encourage them to stay with the company. Delegate responsibilities wherever you can.
You should spend as much time as necessary compiling comprehensive financial information to show buyers not only how successful you are but how your business stacks up for the future. If you can provide evidence of regular recurring revenue streams and supply customer contracts with a healthy pipeline, your business will command a premium. In the same way, reduce perceived risk by settling debts and confirming leases and supplier deals.
Once you hook an interested buyer, you’ll need to consider terms. It’s important that you’re happy with your selling price but don’t let the deal flounder on a minor issue. Being flexible about financing will give you the opportunity not only to achieve a better price but may also open up your business to more purchasers. Consider offering owner-funded finance or staggered payment terms to tempt prospects.
You’re more likely to see your deal through to a satisfactory conclusion if you resolve to be honest with your buyer from the outset. Set a fair price, answer questions openly and establish a rapport built on trust. By approaching your sale in this way, you’ll encourage a similar response from your buyer and everyone will save time and money.
It’s tempting to start relaxing as soon as you’ve made the decision to sell. But this is exactly the point at which you need to retain optimum focus. Drive your business harder than ever now and you’ll see the rewards in a favourable sale price!