Selling a business can be a complex process, which can bring about a lot of stress and anxiety. Making the proper preparations for the sale is crucial to ensure you get the best possible price. Firstly, you want to ensure you know how much your business is worth. Many business owners actually don’t know how to determine the correct value for their business. According to a Forum Brands study, 32% of business owners say they are hesitant to sell their business because they may sell it for less than its true market value.
Fortunately, we have the answer for this in just a few clicks through our expert Business Valuation Calculator. Once you have this valuation to hand, you can start taking the next appropriate steps. Whether you’re planning to sell your business in the near future, or simply want to ensure you’re ready for a potential sale down the line, it’s important to put your business in a selling position. What this means, is to make sure your business is as valuable as it can be.
Here are several steps you can take to maximise your business’s value and increase your chances of a successful sale…
Get Your Finances in Order
One of the most important aspects of preparing to sell your business is ensuring that your finances are in order. This means having accurate financial statements, including income statements, balance sheets, and cash flow statements. You’ll also need to have a clear understanding of your business’s profitability and financial performance. This includes any outstanding debts, liabilities, or legal issues. Negotiating a release for any outstanding liabilities is imperative should you want to sell your business.
One of the most important pieces of financial information needed when selling is your forecast reports. At Nordens, we are experts in this field, helping to analyse your financial data to identify potential areas of risk. Through this forecasting, we can then develop strategies to mitigate those risks. You can then see exactly what needs focussing on to make your business as valuable as it can be.
Address Any Operational Issues
In order to maximise the value of your business, it’s important to address any operational issues. These issues may be impacting profitability or even growth potential. This may include streamlining processes, reducing costs, improving customer satisfaction, or expanding your product or service offerings. All of these heavily infringe upon the value of your business. After all, you want to ensure your business is as efficient as possible.
By addressing these issues prior to selling your business, you can increase its value. This in turn will make it more attractive to potential buyers. Even if you aren’t looking to sell your business right away, this will greatly benefit the day to day running. Once your business is running like a well-oiled machine, you can focus on the things that really matter to you.
Build a Strong Team
Having a strong team in place is critical to ensuring the ongoing success of your business. It also has a huge beneficial effect in making it more attractive to potential buyers. This means investing in training and development for all your employees. As well as this, hiring talented individuals to fill key senior roles within the organisation. Ensure all contracts are watertight, up to date, and truthfully reflective of your workforce. You should also check over all contract clauses to make sure no nasty surprises will await pre or post sale. Any disputes or difficult conversations should be made before selling as this could jeopardise the sale if left untreated.
By building a strong team, you can demonstrate to potential buyers that your business is well-positioned for future growth and has the leadership in place to drive that growth forward.
Surround Yourself With A Strong Advisory Network
As stated, selling your business can be confusing, no matter what business or sector you may be in. You need a strong advisory team behind you who has your back, enabling the process to be secure, well-thought out, and taken care of. If you’re selling your business for the first time this is even more crucial, as you don’t want outsourced professionals capitalising off your lack of experience in selling.
Fortunately, at Nordens our Strategic Advisory department has had many years of experience in selling businesses and know exactly what to do. We work cross-departmentally with our accountants, tax specialists, legal, and HR to establish all those complications and stumbling blocks are dealt with involving total professionalism and complete transparency.
Develop a Solid Marketing Plan
When it comes to selling your business, marketing is key. This means developing a solid marketing plan that includes a clear message about your business’s value proposition and unique selling points, as well as a targeted approach for reaching potential buyers.
To develop an effective marketing plan, consider who can help you identify your target market, develop messaging that resonates with potential buyers, and create a plan for promoting your business through various channels, including online advertising, social media, and industry publications.
In conclusion, preparing to sell your business requires careful planning, attention to detail, and a willingness to invest in the ongoing success of your organisation. By taking the time to get your finances in order, surround yourself with support, address any operational issues, build a strong team, and develop a solid marketing plan, you can increase your chances of a successful sale and ensure that your business is as valuable as it can be.
We hope this has outlined to you what’s needed in the selling process of your business. If you’d like to know any further information on anything mentioned, or anything accounting related for that matter, please do not hesitate to get in contact with us at Nordens, where one of our trusted advisors would be happy talking you through your query.