1. Your business’s resale value should always be on your mind
Selling your business is likely to be far from your mind as you’re in the thick of trying to develop teams, improve productivity and constantly manage cashflow. However, you need to remain focused on the ultimate goal, which is a high-value sale. Therefore, it is important to always be thinking of how you can successfully sell your business — even at the very start of its establishment. This will guarantee you stay the course and keep the business operations streamlined.
An essential aspect of selling your business is having extremely organized bookkeeping reports that are clean as a whistle. Ensure you take the time to perfectly track expenses (and catalogue them properly). When the time comes, it is unlikely that reputable buyers will purchase your business unless they can completely understand your profits and losses (P&L).
One of the greatest mistakes new businesses make is how they decide to track expenses. It may be tempting in the frenzied days of a start-up to hastily throw your records together; however, it is important to never let accurate, clean bookkeeping falter. If you are able to uphold clean accounting records, you will automatically be situated for a more prosperous sale — even many years down the road.
2. Confident and independent employees are essential
In the early stages of opening your business, it may be tempting to try and do everything yourself. However, it is essential that you hire committed and qualified staff members as quickly as possible. Dependable team members are crucial as they can complete errands, handle problems, and lessen some of the stress of your overall workload. As well as helping you while you are running your business, a reliable and experienced team are also important for improving resale value. You should want your business to be able to succeed without you after you sell.
The potential buyer is unlikely to replace every employee. Therefore, you need to ensure that all team members are well trained and can fulfill their responsibilities, regardless of who is managing them. It is important to take the time to train employees hands-on at the beginning. Observe your team completing tasks and answer all questions to confirm they are comfortable with their role. Ensure you document processes and practices to allow employees to refer to if needed; and to support a smooth handover when the time comes.
Once you feel your team is up to scratch, stand back and let them work. If you hire qualified employees and take the time to train them well, they will be able to cooperate with other team members effectively, carry out their responsibilities, and ensure the company operates flawlessly on a daily, weekly, monthly, and yearly basis. A highly organised team is especially attractive to potential buyers as it will reduce the amount of training they will need to do after purchasing the business and make any employee changes down the road easier to manage.
3. Know the right time to sell your business
Once you make the decision to eventually sell your business, you then need to work out the best time to sell.
For example, what signs should you look for in the market? Will you need to make a specific amount of profit? Will you seek help when deciding to sell, or will you be handling it alone?
While all these points are important aspects of selling, the most essential ways to evaluate your business are through profits and revenue. Steady growth in these areas will indicate an effective business model, products, and services. Once your business is exhibiting consistent month-over-month revenue progression, you will know that it is the right time to sell.
At ABBA Group we can assist you in deciding if it is the right time to sell your business. Our skilled brokers have an expert knowledge of the business market and can assess your business to let you know if it is the right time. They can also provide you with tips on how to improve your business for sale and ensure that it is ready.
4. Effective negotiation is a highly important skill
The skill of effective negotiation is crucial in business – and is even more important during the tough conversations that are likely to occur when selling a business. It is likely that you will need to speak with brokers, enterprise businesses, and potential buyers during the selling process, and sometimes these discussions can get complicated.
For example, prospective buyers may offer a price that is very undervalued to wrangle you into a lower price range. However, you know the value of your business, and should not take the bait. If you are confident in the value of your business, you will be able to negotiate confidently and efficiently and bring in a price that is worthy.
As a part of our services at ABBA Group, we handle all negotiations for you. By entrusting this process to our experienced and skilled negotiators, you can be assured that you will receive the best possible outcome.
5. Determine how you will say goodbye to your business
The final step in preparing your business for sale is deciding what your role will be after the sale goes through. Regardless of if you stay with business after the sale or not, your role will not be the same. If you and the new owners decide that you will stay on, ensure that you take the time to accurately learn your new responsibilities and reconcile the differences.
If your decision is to leave the business entirely after the sale, you still need to handle saying a final goodbye to your creation before you head off on your new adventure. It’s important to understand that selling your business can be very emotional — even if it is something you truly want to do. It can be tough to walk away from the special connection you might feel with the business you worked so hard to get off the ground.
If this is the case, it is important to remind yourself of all the goals you achieved. This could include growth indicators, revenue achievements, and even the simple fact that you are selling your business. Praise yourself for your achievements, prepare yourself for the handover in ownership, and then take some time off to rest and brainstorm your next entrepreneurial idea.
Remember, even if you’re not selling, operate like you are!
At the end of the day, the process of successfully selling a business will be different for every business owner. Industries will always go through ebbs and flows and business models may thrive and decline. Ultimately, the selling strategies that work for one business may not for another.
However, by following the steps above, you will be sure to nurture a highly organized business that operates efficiently and professionally.
At ABBA Group we know and understand the ins and outs of the business world and can give you inside knowledge and understanding on what constitutes a successful sale. We will guide you through every process and ensure you receive the best outcome for your business.
