You May be Ready to Sell—But is Your Business
You May be Ready to Sell—But is Your Business
Start by putting yourself in the shoes of a potential buyer and ask yourself, “What can I do to make this business more attractive?” You, the seller, are an important part in the overall marketing plan, and your role starts with cleaning up your business—both physically and financially. Remember, as a seller of a business, you are now a retailer in the “business for sale” market, and the buyer is your customer!!!
A good rule to keep in mind as you approach a sale is: Run your business operationally like you’re going to own it forever. Run it financially like you want to sell it.
Operational Management
Once you make a commitment to sale, you may experience a slight emotional letdown or lessening of your commitment to your business. Do not let this happen. If anything, shift your operational effort into overdrive. Improve your systems and document your procedures, re-train your employees, take extra special care of your customers, re-visit your advertising programs for effectiveness.
In short, do all the things you have always done to build a good business, and try to do it even better! Even a slight letdown can result in negative trends developing, including declining sales and employee turnover.
Financial Management
Many business owners enjoy the tax benefits that come from owning a small business. However, when it’s time to sell, it’s time to “clean up” your financial statements to make them as clean and transparent as possible. The fewer “discretionary” items you expense through your business (like travel expenses for that stockholders “meeting” in Hawaii, or all of your kids’ Christmas presents), the more transparent and believable your financial statements will be to a buyer and their banker.
Do not artificially remove core expenses from the business. If it is a business expense, it needs to be treated as a business expense
Listed below are a few other recommendations in several areas that will help you successfully market your business for sale, and help maximize its sale price:
Financial Records
A buyer has to understand the financial past, and future potential, of your company. This means you need to have up-to-date financial statements—income statement and balance sheet—on a monthly basis. They should clearly and accurately reflect the operations of the business. Try to minimize “extra” expenses, and be sure all of your revenue is reflected in your financial statements. Consider having a bookkeeping service prepare your financial statements—it increases the quality of your information, and the confidence buyers have in that information. BizByOwner’s Business Offering Package helps sellers organize their financial presentation for buyers in a professional manner.
Physical Appearance
First impressions count. Whether you run a high-end retail store or an equipment rental yard, your facility needs to be clean and organized. Get rid of excessive clutter and old inventory. Make sure any signs are professional (not hand written!). Touch up paint, replace old carpets, replace broken glass, and repair or replace broken fixtures. Remember to do all of this on the inside and the outside of your facility.
Remember, you’re trying to tap a buyer’s emotions with dreams of achieving their goals of owning and running their own business. A great bottom line can lose a lot of value if everything else doesn’t stack up. BizByOwner subscribers receive a Facility Inspection Report that helps them be objective when evaluating the clean up needs of the facility.
Operations
Evaluate your operations in light of the best way to run your business. Is there a point of sale system you always wanted but never purchased? Now might be the time if it will improve the ability to run the business and help your business appear up-to-date rather than over-the-hill. Be sure your employees are well trained and have clean uniforms, etc. Document some of your basic procedures in a manual—this creates a sense of comfort for a buyer by helping them believe they can successfully run their new business.
Price & Terms
Realistic value expectations and flexibility with regard to the terms you are willing to accept helps prepare you for assessing offers and negotiating with buyers. A business valuation is a critical part of the selling process. If possible, have a valuation performed when you are more than six months away from selling (Ideally, two to three years out), so you can begin to position your business for greater value when you do sell.
Conclusion
If you really want to sell your business like a pro and maximize your profit, be sure you focus on the subjective impression your business makes on a buyer with both the physical and financial presentation of your business.
Seek a value that is justified for the opportunity your business represents, but be realistic in your expectations, or you’ll be sitting on it a year from now without achieving your goal of a successful exit. Operate and promote your company in a way that will deliver a favorable lifestyle to a potential purchaser as well, rather than just profits. Try to view your business from the outside looking in—put yourself in the buyer’s shoes—and ask yourself: Is this a business I would want to buy? And make sure that it is.
You May be Ready to Sell But is Your Business - To learn more about this author, visit Don Beezley's Website.
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If you were selling your car, you’d probably vacuum the inside and wash and polish the outside in the hope of selling it faster, or getting a few hundred dollars more—or both. In a competitive business sales environment, and a world of ever more savvy buyers, it’s more important than ever that you put a little “polish” on your business when it’s time to sell.
Start by putting yourself in the shoes of a potential buyer and ask yourself, “What can I do to make this business more attractive?” You, the seller, are an important part in the overall marketing plan, and your role starts with cleaning up your business—both physically and financially. Remember, as a seller of a business, you are now a retailer in the “business for sale” market, and the buyer is your customer!!!
A good rule to keep in mind as you approach a sale is: Run your business operationally like you’re going to own it forever. Run it financially like you want to sell it.
Operational Management
Once you make a commitment to sale, you may experience a slight emotional letdown or lessening of your commitment to your business. Do not let this happen. If anything, shift your operational effort into overdrive. Improve your systems and document your procedures, re-train your employees, take extra special care of your customers, re-visit your advertising programs for effectiveness.
In short, do all the things you have always done to build a good business, and try to do it even better! Even a slight letdown can result in negative trends developing, including declining sales and employee turnover.
Financial Management
Many business owners enjoy the tax benefits that come from owning a small business. However, when it’s time to sell, it’s time to “clean up” your financial statements to make them as clean and transparent as possible. The fewer “discretionary” items you expense through your business (like travel expenses for that stockholders “meeting” in Hawaii, or all of your kids’ Christmas presents), the more transparent and believable your financial statements will be to a buyer and their banker.
Do not artificially remove core expenses from the business. If it is a business expense, it needs to be treated as a business expense
Listed below are a few other recommendations in several areas that will help you successfully market your business for sale, and help maximize its sale price:
Financial Records
A buyer has to understand the financial past, and future potential, of your company. This means you need to have up-to-date financial statements—income statement and balance sheet—on a monthly basis. They should clearly and accurately reflect the operations of the business. Try to minimize “extra” expenses, and be sure all of your revenue is reflected in your financial statements. Consider having a bookkeeping service prepare your financial statements—it increases the quality of your information, and the confidence buyers have in that information. BizByOwner’s Business Offering Package helps sellers organize their financial presentation for buyers in a professional manner.
Physical Appearance
First impressions count. Whether you run a high-end retail store or an equipment rental yard, your facility needs to be clean and organized. Get rid of excessive clutter and old inventory. Make sure any signs are professional (not hand written!). Touch up paint, replace old carpets, replace broken glass, and repair or replace broken fixtures. Remember to do all of this on the inside and the outside of your facility.
Remember, you’re trying to tap a buyer’s emotions with dreams of achieving their goals of owning and running their own business. A great bottom line can lose a lot of value if everything else doesn’t stack up. BizByOwner subscribers receive a Facility Inspection Report that helps them be objective when evaluating the clean up needs of the facility.
Operations
Evaluate your operations in light of the best way to run your business. Is there a point of sale system you always wanted but never purchased? Now might be the time if it will improve the ability to run the business and help your business appear up-to-date rather than over-the-hill. Be sure your employees are well trained and have clean uniforms, etc. Document some of your basic procedures in a manual—this creates a sense of comfort for a buyer by helping them believe they can successfully run their new business.
Price & Terms
Realistic value expectations and flexibility with regard to the terms you are willing to accept helps prepare you for assessing offers and negotiating with buyers. A business valuation is a critical part of the selling process. If possible, have a valuation performed when you are more than six months away from selling (Ideally, two to three years out), so you can begin to position your business for greater value when you do sell.
Conclusion
If you really want to sell your business like a pro and maximize your profit, be sure you focus on the subjective impression your business makes on a buyer with both the physical and financial presentation of your business.
Seek a value that is justified for the opportunity your business represents, but be realistic in your expectations, or you’ll be sitting on it a year from now without achieving your goal of a successful exit. Operate and promote your company in a way that will deliver a favorable lifestyle to a potential purchaser as well, rather than just profits. Try to view your business from the outside looking in—put yourself in the buyer’s shoes—and ask yourself: Is this a business I would want to buy? And make sure that it is.
You May be Ready to Sell But is Your Business - To learn more about this author, visit Don Beezley's Website.
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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