11 Tips To Sell Your Business With Highest Value
It has taken you years to build a successful company. Your business is profitable and full of potential, but it is time to venture into something else. It could be another business interest, hobby, family, or travel. So, what do you do? Selling the business is the best option on the table. And having decided to sell, you should ensure that you get the best price for the company you have worked so hard for.
However exciting the new interests are to you, it is important you take the time to know what your business is worth and even maximize its value to get the best returns. Valuing your business can be hard to tackle on your own; however, professional appraisers can help. The specialists know exactly what to look at and how to calculate the value of the business to prepare it for selling. But how, then, can you sell the company at the highest value possible?
- Evaluate all aspects of the business
When looking to buy a business, the buyers are more interested in the earnings or revenue. However, you should still pay attention to all other elements of the company, such as the inventory and assets. They all matter and should be factored in as they can take the value of the sale higher. Ensure that you know everything about the business and check the current conditions of everything that matters. You can make changes where necessary, but no stone should be left unturned.
- Have your financials in order
There is strength in numbers, so your financial records should be in top shape and looking their best. Follow the professional standards to track your finances and ensure everything is in order. Serious buyers will usually request an audit or review of the financial record; ensure your credit records and taxes are all straight. Your financial status is crucial, and you should take a little more time to clear it up where necessary; otherwise, buyers may lose interest.
- Let your business stats work for you
Getting the business story straight when selling is important as it can determine how interested the buyers are. Your business data tell the story on your behalf; lip services are interesting, but the buyers want something tangible to work with at the end of the day. For instance, carefully tracking the status of the business’s accounts receivable, sales, payables, and monthly expenses should be prioritized. When key metrics like profitability, income, and revenue show tremendous improvements, the buyers won’t hesitate to take you on your offer. One of the ways through which you can sell high with the stats is to eliminate nonessential expenses or those not relevant to the potential buyers. Things such as entertainment and travel expenses should be scrapped off the financials or adjusted reasonably. The last two years will largely impact the buyer’s reaction. Check to see if your data works to your advantage.
- Have your business processes established and documented
Nothing gives buyers more confidence than knowing that the business can run smoothly without you. It is also important to remember that they are taking over and not starting and therefore want clear processes or how everything runs within the business. Documenting your established processes will give the buyers confidence, not just in the company but also in you as the seller.
- Benchmark your business against the relevant industry
The worst thing you can do when selling is think that you are the best there is and that buyers will come tumbling over the sale offer. After understanding the business financials and metrics, compare your business with others in the same industry. This is a good way of knowing where you stand and whether you can make any important improvements to take the business value higher. Remember that buyers will always compare your business with other selling, and you should therefore be at the top of the game. Advertise the business, bring in new customers, or bring social media campaigns on board; do whatever it takes to be at the top of the list in your industry.
- Come up with ways to increase business profitability
The more profitable the business is, the higher its value and the number of interested buyers. It would help if you came up with ways to increase profitability before the sale. Some areas you can target include your contracts and insurance, where you can get new vendors for better deals. Your staff, where you can consider reducing the labor expenses where possible, and inventory, where you can reduce the cost of sold goods and expenses. Drastic cuts can damage the business, especially so close to a sale. Be subtle about it by making sure you are working to improve your bloated financials and using the right way to calculate the business value.
- Carefully choose the best possible time to sell
The best time to sell any business is when it is at its peak in terms of performance and profitability. Suppose your business relies on a season, for instance, time the sale during your best. It is also best to make the offer when the profitability is impressive; buyers shy away from businesses that look as if they are dipping; they will think you are selling because of the eminent losses. The transition process will take time and should be considered because you might need to be around for a little longer than expected. Let the time of sale work with the exit plan you have.
- Have your assets evaluated
Whereas your current financial status determines the value of the business, the assets you have also add to it and should be evaluated properly. The incoming owner will possess the entire business, and you should include your assets in the purchasing price. Inventory, furniture, buildings, and vehicles are part of the business. The same goes for digital assets like custom-built software and the company website. They are all valuable and can influence the final price positively.
- Develop effective presentation materials
When selling, you must translate the business strategy and the results into proper corporate finance language. This calls for appropriate presentation; hence you will need to develop effective marketing materials such as a TikTok marketing strategy. Also important to remember is that you will need to do it repeatedly to the different interested parties until you find the most suitable one. The more prepared and professional you appear, the better the impression on the buyers, and the more ready they will be to take your offer or make you one.
- Market the sale effectively
Most sales are taken by locals who probably have some information on the business and its performance. However, to get the best value for your business, let your buyer list be comprehensive. It would be best if you devised a strategy to reach as many buyers as possible. If there is a confidentiality agreement, ensure that it is well executed but to your advantage as is legally possible.
- Capitalize on what you are good at
Showing off your good side can make all the difference in the sale. Buyers are always inclined to the strengths of the business; hence if there is a particular area you are best at, make the most out of it when breaking down the business to the interested buyers.
