When you are trying to sell a business, your main goal will be trying to attract the people that are serious about buying so that you don’t your time with people that are not.
To do this, you need to be serious about selling and there are a few things to do to make sure that you are.
Preparing your business for sale is an important part of making sure that you get the right buyer. You will need to make sure that you have a clear idea of what that serious buyer will look like.
Put yourself in the buyer’s shoes. What it is about a business that you would be attracted to if you were a buyer? This is what you need to showcase to potential buyers.
You will need to get your business valuated
. It will be to your advantage to make sure that the valuation is honest and thorough.
With a clear valuation of your business
you can fix anything that is problematic and give it a price tag that will get serious buyers to pay attention.
Get things in order
The valuation that you get should include the financial records of your business and your assets- tangible and intangible.
For a sale to go through, your financial records have to have kept transparently for a number of years. It is no good to keep records that no one else will ever be able to cipher.
In this way, getting worthwhile buyers can mean that you have been preparing for the possible sale of your business for a few years.
Buyers are going to be concerned with whether or not they will be able to make money once they buy your business. You will need to point out the way in which they will be able to do this.
Be clear about future opportunities and a future vision that the buyer will be able to latch onto as a reason to purchase your business over another. Think about how you can prove that your business has a proven track record of profitability.
The worst thing that you can do if you are trying to attract the right buyer is to try and hide anything about your business from them. A good buyer will always do their due diligence and it is very likely that they will discover the things you tried to hide.
If you try to hide things that are discovered later, buyers will become reluctant to spend money on your business.
Be honest about your business’s flaws. This doesn’t mean that you can’t offer an explanation or present them in a more favorable light.
You should explain the problems with your business, if there are any, and how these problems can be improved.
Advertising your business is difficult. There is a chance that your customers or loyal staff could get spooked if they hear about the sale and this can lower the value and the price that you will get.
Using a broker can solve this problem because you can ask them to advertise in confidence. You could also use blind advertising where none of the company details are revealed.
Consider how long your business has been trading for when you’re thinking about selling it. It takes time to build the value of a business. You need to establish customers and financial accounts.
Having done this, do a thorough analysis of the market that you are trying to sell in and who your buyers will be. Having a good idea of what your business is worth and setting the asking price at this number should mean that buyers are more likely to come to you with offers.
If you are going to find a buyer for your business, you need to make sure that you can stand up to your competitors. Your business won’t be appealing to buyers if there is a business that does it better than you.
Buyers will usually be looking around at various businesses that are for sale and so your business needs to be able to compete. Consider explaining to potential buyers why you made the decisions that you did and how this impacted the way that your business performed.
They may have different ideas of who the customer base would be, for example, and, therefore, they could potentially envision being able to turn a higher profit. Be sure to have a clear understanding of what future market trends will be and how this may work to the advantage of potential buyers.
Keep things clean
What will be most important when you try to sell your business is that you are clear and transparent about your business. Any inconsistencies in the financials and the due diligence are going to scare off potential buyers.
If everything is easy for buyers to understand, it will be a much easier task to attract the buyer that you want at the price that you want.
By Bruce Hakutizwi, USA and International Accounts Manager for BusinessesForSale.com, the world’s largest online marketplace for buying and selling small and medium size businesses. Bruce has over 7 years’ experience working within the US business transfer marketplace connecting buyers and sellers.