Selling your business can be very rewarding, and it should be the ultimate goal of any business owner. It is an opportunity to “cash out” on all of the hard work you put into creating and developing your business.
Unfortunately, for many business owners, the process turns out to be a disappointment. Often times, this is because they are unable to find a buyer at all, or because they only receive offers that are far below what they think the business is worth.
How can you ensure that, when the time comes to sell your business, you are able to receive a premium price? Below are three tips that you can begin implementing today.
Keep impeccable books.
Nothing is going to turn off the potential buyer faster than sloppy bookkeeping. Buyers want to be able to see the numbers, and they want these numbers to be accurate. Sloppy bookkeeping practices will cause potential buyers to question everything else about the business, too.
A professional audit will contribute to a buyer’s confidence. Be sure to track all the assets of your business, including intellectual property.
Do not wait until the last minute to get your books in order – it is too late at that point. You never know when unexpected circumstances will force you to sell your business in a hurry, so be prepared.
Protect your intellectual property.
Having patents or similar protections in place will increase the value of your business. Protecting intellectual property will benefit your business throughout its lifespan, not just when you are ready to sell. Buyers will be willing to pay more for a business that has key assets and processes protected by law.
Make sure the business is ready for someone else to take over.
If YOU are your business, that is going to make it hard to sell. To be worth something, your business has to be based on more than your personal talent and abilities. If your staff is capable of running your operations, and you have systems in place that make it possible to train newcomers, your business is much more valuable. Be sure to document key processes and procedures so that the buyer can step in and keep the business running seamlessly.
Many business owners rely on the proceeds of their sale to finance their next venture or even retirement. It is important to do everything you can to ensure that your business garners the price it deserves. If you would like to learn more or if you’d like some assistance along the way, please contact us today.