It’s not just about cash, selling a business is the result of years of effort and the beginning of a new book. You may be retiring, switching direction, or starting something new, but with proper planning, you can achieve the maximum value for your company and effect a seamless transition for all concerned. Proceed with these three basic steps to put your business in sale shape.
- Define Clear Objectives and Internalize Operations
Before you start selling, define what success is for you. Do you have a desired sale price? Do you want to stay on in an advisory role, or to exit completely? Are you interested in the buyer maintaining your company culture? These are questions that will determine your approach and restrict suitable buyers.
Equally important is the internal health of your firm. Acquirers seek companies that will survive without a lot of owner involvement. That means optimizing your operations—i.e., creating or refining standard operating procedures, improving customer management systems, and eliminating any obsolete technology. Most significant, build a strong leadership team that can progress independently. A firm that can stand alone is far more attractive to acquirers.
- Organize Financial and Market Information
Transparency and accuracy in your books can either seal the deal or ruin it. Buyers want tidy books showing historical trends and possible futures. Have at least five years’ worth of financial statements, preferably audited, and highly detailed projections for the next two years. Present profit and loss accounts, balance sheets, and cash flow statements.
Understanding your position in the marketplace also adds value. Understand your customers, where you’re competitive, and what’s fueling trends in your market. Not only is this positioning your company as a smart acquisition target, it can even attract the type of buyer you want.
- Maximize Business Value and Leverage Professional Help
All successful companies to which people are drawn have recurring revenue, diversified customers, strong brands, and proprietary products or processes. Identify what is unique about your company—and invest time in creating those assets before bringing it to market. If there are weaknesses, address them ahead of time.
Lastly, do not do it alone. Get a team of experienced advisors, including a financial advisor, attorney, and M&A advisor. These advisors are able to assist with valuation, find appropriate buyers, negotiate, and ensure all legal and regulatory requirements are fulfilled. Their experience can lead to a less complicated and more effective process.
Conclusion
Preparing your business for sale isn’t just about cleaning up your books or listing your company online. It’s about presenting a business that’s operationally sound, financially transparent, and full of future promise. By setting clear goals, organizing your data, and leaning on professional guidance, you’ll not only increase your business’s value but also ensure a deal that aligns with your long-term vision.