At some point a business owner considers selling their business. Sometimes it is just a fleeting thought. Sometimes its a thought of “I don`t need this anymore, get me out”. Other times its a well planned out progressive process. You want to sell your business- how do you sell it for more.
This sounds like a fairly straight forward approach, but just as the selling of a business process can be very involved, the question of how to sell it for more firstly needs definition. I am a business broker based in Florida and speak to many many business owners about the potential sale of their business. I also sold my own business several years ago.
Selling Your Business When The Time Is Right
Just consider the simple analogy of having a rusty bike in the garage with flat tires that you want to sell today. You put it out at the end of the drive way put a For Sale sign on it- what do you think it will sell for? How can you sell that bike for more tomorrow than you can today?
Selling Your Business For More:
- Selling your business for more can be a very good thing and very reasonable goal.
- Trying to sell a business for more than it is worth can ultimately result in your business not being sold at all.
- Setting the Goal today to improve your business, prepare it for sale so that it is worth more after your improvements is probably your best approach
- Wanting to sell your business for more than “what you heard a local competitor sold for” can also be a mis-guided path.
Preparing Your Business For Sale
So selling your business for more is a reasonable and understandable goal. How do you get more for your business? Start today preparing your business for sale. Like so many of your other important business decision, prepare yourself a to-do list and systematically address those items. Below are some items you will want to include on your to-do list to help ready your business to sell for more. Ask and honestly answer these questions about your business.
How are your financials? Are there some unusual entries on your P/L that have escaped needed adjustment? Are all sales accounted for? Do you have a good clean P/L statement? For smaller businesses Do you have a P/L and Balance sheet?
How reliant is your business on you. What can you do today to help your company be more about your company and less about you.?
How documented are your systems, procedures, policies, pricing structure?
Is your customer base as diverse as it should be? How reliant is your business on a few key customers. And again do those customers do business with you the business owner or with the company?
Do you have the opportunity to add recurring revenue streams to your business, but elected to not pursue? Do you have some contracted customers that you just haven’t updated contracts with?
Spend some time to meet with some of your trusted advisers. Dont rely on information you hear through the grapevine about this person selling their business for this amount. Talk to your attorney, your accountant , or visit with a business broker start to really learn the marketplace. Have you scraped the rust off your bike?, painted it ? oiled the chain? pumped up the tires? put an ad in the newspaper? on the Internet?- Is your bike worth more today than it was yesterday?
How do you sell your business for more tomorrow or next year than it is worth today? Start today preparing your business for sale.