How to tell if you are ready to sell your business

Selling your business is not just about financials, it can often feel like you are selling a part of yourself. Knowing what your endgame is can help reduce some of the stresses that come with selling a business.

Whether you are planning on retiring, looking to relocate, trying something new or facing other circumstances (such as health) taking some time to plan and prepare are a vital part of the process.

Creating a plan for selling your business

When it is time to sell your business you will want the best price for it. The sooner you plan for the sale the better, this can be a few years in advance, to ensure your business is in the very best shape to attract an investor.

The more attractive the business looks in the market, the better price you will achieve or the better yield you will see on selling your company shares. Your business will mean a lot to you, however a buyer will have a more rational and pragmatic viewpoint.

Take time to get your house in order for a potential buyer, so you may present your business as an opportunity.

  • Invest in adding value – keep profits in the business, sell assets that are not used, reduce your personal drawings and put money back into the business
  • Work on your documentation and reports – potential buyers will want to review your business plan and financial reports to ensure they are buying a sound business with attractive profit forecasts. We can help with these reports.
  • Have a proper exit strategy – by having a plan that has agreed targets, so you can track and measure when goals are being met, and a strategy your team can get behind.
  • Resolve any outstanding issues – whether it is an employment issue, maintenance, compliance, health and safety or legal. We can help give your business a health check so there are no red flags
  • What is it worth? – the value of something is based on what the market is prepared to pay, however the value of a business will also be based on the profit you make, the assets held, intellectual property or what it would cost a potential buyer to build the business up themselves.
  • Communicate with the team – make sure you have communicated with staff and stakeholders for the best outcome.
  • Consider where your buyer might come from – competitors, investors, employees. You may already know your buyer, make sure you have the help you need to navigate the negotiation process
  • Obligations – talk to us about taxes and other obligations that might apply to the sale of your business.

 If you are considering selling your business you will need to make a plan. Come and talk to us about creating a workable exit strategy to get the best return for your business.