There’s been a bit of a feeling for the last year that it’s not a good to time to be selling a business. That Covid-19 has created too much uncertainty, leaving investors twitchy. But while that might have been true in mid-2020, we’ve had a whole year of relative quiet on the business market. Investors are actively searching for acquisitions. And this is good news for sellers. But if you are on the point of putting your business up for sale, there are a few things you probably need to think about first.
Five Things to Consider When You Want to Sell Your Business
1. Do you really want to sell your business?
OK, so perhaps this is a bit of an obvious question. But it’s also kind of an important one. Not just because you really need to be certain before embarking on a business sale – in many cases, this is a project that will have consumed your heart and soul for years. But because any prospective buyers will need to know that you’re serious. And why you’re wanting to sell. So, take some time to think things through before you start working through the formalities.
2. Get to know your numbers
If you’re going to sell your business, you need to have realistic expectations. And part of that is fully understanding what you are offering to any potential buyers. While your niche and USP are important, the main value driver in any business transaction is cold hard cash. Understanding the current turnover, profit, overheads, and all the other key aspects of your balance sheets, as well as realistic future predictions, will put you in a really good position to convince buyers that your business is a viable proposition.
3. Work on the status of your business
Most investors are looking for acquisitions with potential. A brand that has a solid reputation has greater kerb appeal. Because if a company doesn’t need to be ‘fixed up’ in order to turn a profit, it can return a far greater – and faster – ROI. So, while it’s tempting to let things slide once you’ve made the decision to sell, it’s more important than ever before to invest in your customers and the customer experience. You need to drive sales, cut overheads, improve service, enhance products. Because then, you’ll get what your company deserves when the sale takes place.
4. Do your own due diligence
No investor will ever take on a business without undertaking due diligence. This will reveal any potential issues with contracts, suppliers, employees, property and lease risks, and business policies, as well as financials. Carrying out your own due diligence before putting your business up for sale will not only prepare you for any problems that may impact the sale/sale price of your business but give you the chance to put corrective measures in place.
5. Consider a business broker
Selling a business can actually be a full-time job. Trying to do it yourself while still managing the day-to-day administration of your company can be counter-productive, as well as exhausting. You have myriad things to take care of, from marketing and negotiating, to handling timewasters. A business broker can help you through every stage of the sales process, including helping you to assess the true value of your proposition. It takes the time and stress out of moving on.
As long as you are prepared, there is no right or wrong time to sell a business. There will be a market, you simply need to go out and find it.
If you’re looking for support selling your business, get in touch with Ventura Business Brokers.