If you’re considering selling your business – or simply want to maximise its value to secure fresh investment – you should be prepared to lavish a little time and energy on making sure it’s up to scratch.
It can feel like a lot of hard work, especially if you’re getting ready to move on to fresh ventures. But, by getting the detail right now, you’ll create a more desirable – and saleable - proposition to tempt buyers and investors alike.
Because you know your own business like the back of your hand, it’s likely that you’re also blinkered about its shortcomings. It’s important to take a step back and view your business through the eyes of a prospective buyer.
Be honest: if you were thinking about buying your business, what might put you off or encourage you to put in a low bid? Ask someone you trust to give you an unfiltered appraisal and take their comments on board. A little elbow grease at this stage – whether it’s upgrading your IT systems, painting your premises or doubling down on your marketing – could equal a better sale price.
A set of well-organised accounts will not only show you’re on top of your finances but will also demonstrate the efficiency of your everyday operations. Prospective purchasers will be reassured if you keep orderly records and can substantiate ongoing customer contracts, as well as accurate information about your inventory, leases and supplier arrangements. If you employ staff, it’s also worth ensuring that documents such as your staff handbook, HR policy, and health and safety protocols are up to date, too.
It may seem counter-intuitive to start scoping out opportunities to develop and grow your business when you’re about to relinquish control but it may be the smartest move you’ll make.
While buyers will be interested in your financial history, as evidence of solid performance to date, they’ll be much more motivated by the chance to add value in the future. If you can demonstrate a way to diversify income or expand your operation into a new area, you’ll create potential that will ultimately translate into a better sale price.