INCREASE THE VALUE OF YOUR BUSINESS

Selling a business is a major challenge. Beside the complexity of the process and the emotions involved in handing over the company to someone else, entrepreneurs need to make sure they maximise the value of the business they’ve put so much effort and time into building.

Making cosmetic changes to a company at the last minute before putting it on the market is a recipe for disappointment. Planning and preparation for a transition can take years and entrepreneurs need to take the time to do it right.

1.  Seek advice

You should work with an experienced outside adviser who can help you prepare your business for sale, including having an expert evaluation conducted. You need professional advice.

2.  Profits are crucial

If you are only breaking even don’t expect a high offer.Good retained earnings on your balance sheet—the portion of the net income that hasn’t been distributed to the shareholders—indicates to buyers that the business has been profitable over the long run and is healthy. Don’t take too much money out of the business if at all possible.

3.  Increase sales and lower expenses

This is a given for all businesses but it’s even truer when planning to sell. Analyse your processes and look for ways to increase efficiency, cut costs and control stock without effecting your operations. Brush up your marketing plan and focus on boosting sales including tapping new markets or offering new products and services. Focus on creating a diversified customer base that, ideally, generates recurring revenues.

4.  Continue to invest and improve

One of the biggest mistakes business owners make is to take their foot off the accelerator after deciding to exit. The status quo is not an option. The moment you start taking less care of the facilities and process improvements or stop investing in new equipment, you are reducing the future value of your company.

5.  Develop a strategic plan

A formal plan that presents measurable goals and milestones for the coming years will give your business credibility as a growing concern with long-term potential.

6.  Develop repeatable processes and empower your people

The processes in the business need to be repeatable and teachable, advises John Warrilow in his Built to Sell: Creating a Business That Can Thrive Without You. “If your business can’t function without you, you will have a hard time finding a buyer,” Warrillow says.

Also, train, motivate and empower your people. Pay particular attention to the management team. Work to solve any internal conflicts and strive to keep employee turnover rate low. A strong, professional team adds value to the business—especially in companies with few tangible assets.

7. Stand out from the crowd

In many ways, selling your company is also a marketing challenge. That’s why it’s important to showcase to potential buyers whatever differentiates your product or service from the competition. Ask some of your long-time clients for testimonials explaining why they are doing business with you and what keeps them coming back.

 

Regardless to whether you actually go through with a sale, these tips will help you build a stronger, more efficient and valuable company.

Thanks to Charles Gaudet for the above advice.

 

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