While many business owners start with the dream of building a successful company and running it for years to come, selling it off offers quite a few advantages. These include the chance to retire early, the ability to start a new endeavor without burning out on the old one and many more. Where to begin this exciting journey is the first step. Understanding your financial statements and profit margins is vital. However, how do you make a business ready to sell?
It starts with having a good business plan and then working that plan. Specifically, you’ll need a succession strategy. This strategy and plan should incorporate a wide range of things that will both educate potential buyers about your company and the direction it is headed in the market. Remember, selling a business is much like selling anything else. You’ll be competing with other sellers. Selling your business may take time, so plan for at least a year before you are able to sell. To make your business as attractive as possible, make sure that your succession strategy includes a list of documented achievements such as financial statements and your profit margin to highlight your business growth, profitability and success. A business consultant can give you direction and help you through this process.
You’ll also need to get your accounting in order. Having all of your financial documents in order and available for potential purchasers to inspect instills a sense of trust and confidence. Having sound financial statements and showing where your profit margins are gives the buyer a much better foundation of where your company competes. It also shows the buyer your recurring income. If you’re not sure how to plan your succession strategy, hiring a business consultant is essential. With the help of a skilled consultant, you can build an accurate strategy that both puts your business in the best light possible and provides the vital data that purchasers will need to make an informed decision.
Of course, you will need to choose the business consultant you work with very carefully. Make sure that the professional you hire has considerable experience with succession planning (for a variety of transfer types). This will guarantee that your sale goes smoothly and that there are no unanticipated issues during the process. Making your business attractive to buyers can be easier than you think if you plan ahead, work with a professional consultant and take the time necessary to ensure your business and paperwork is all in order.
Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).