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You’ve decided to sell, solidified your reasoning, and assembled your team; it’s time to sell your business! (If you haven’t, check out this article.) If you want to sell your business at the highest price possible, now it’s time to prepare, prepare, prepare.

There are many actions to take and things to consider when getting everything ready. Here’s what you need to know to prepare your business for sale.

Putting Yourself in the Buyer’s shoes 

Throughout the process, ask yourself, “what would you want to see when buying a business?” The answer could be current and accurate financial records, working equipment, clean office spaces, and more. By putting yourself in the buyer’s shoes, you can anticipate areas of improvement that will maximize your chance of selling at the highest price point.

In thinking about what the buyer sees, an important question to ask yourself is: Am I required for this? Is this dependent on me and only me? If your business can’t survive without you there, you will have a hard time finding a buyer.

Develop Customer Loyalty

Customers are the life of your company; without them, your business wouldn’t exist; which is why customer loyalty is essential. The best way to cultivate this kind of loyalty is to build your company's brand. Think of Coca-Cola. Instead of focusing solely on the product, they sell the idea that Coke brings people together and encourages sharing and happiness. Other companies buy licenses of the Coca-Cola brand to use with their products. Coca-Cola’s brand is what’s valuable and does the work for them, not the product or the owner.

Develop Team Loyalty

Your action plan should include your employees as well. Employee loyalty is essential, as no new business owner wants to face employee turnover. Transitions are smoother when experienced employees are there to help. Building team loyalty requires building a great company culture. Your company culture is your overall values, feelings, and behaviors that develop your workplace environment. Excellent company culture will make current team members want to stay and make your company more desirable for job seekers, which will make your company desirable to buyers. 

Establish Processes

Almost everything comes with an instruction manual. Your business should too. Start writing “how-to” guides for the business’s new owner. It’ll help the transition process, as well as show that the company can function even after you’re gone.

Increase Profitability

You want to make your business look as profitable as possible. This can be done by finding places to reduce costs, creating efficiencies, and considering additional revenue streams.

List All Your Assets

All assets have the chance to boost your business’s price. These can be both physical and intangible. Examples of physical assets are furnishings, fixtures, and equipment. Intangible assets could be contracts, agreements, customer relations, and brand recognition.

Have Your Documents Ready

Selling your business is an involved process, so make sure you have everything in writing. You will need several specific documents, including a non-disclosure confidentiality agreement, a personal financial statement form for the buyer to complete, an offer-to-purchase agreement, and a note for seller financing.

Questions

Have questions about preparing your business for sale? One of our business advisory experts can help. Contact us.