Last Updated on July 13, 2024 by Dave Schoenbeck
Running your own business is challenging, and selling your business is equally problematic. If you plan on selling your business, remember that it’s a complex undertaking that involves careful, thorough planning. The sale’s success depends on how well you prepare and communicate a compelling story.
It generally takes at least 18 months to sell a company, and many potential buyers will want to look at your business plan and past results. Here’s some advice to help you get on the right track as you prepare your business for sale.
Top 3 Tips for Selling Your Business
1. It’s time to get busy with a well-written 100-day plan.
You need to develop a presale improvement plan that includes much critical information. First, you need an understandable and executable marketing plan that clearly defines your customer demographics, explains your business offering, and your firm’s points of differentiation. Be very specific about your competitive advantages.
In addition, create an exciting overview of the marketplace, your focused growth plan, and how the future business buyer will succeed. Make sure to articulate your vision. Additionally, describe the roles of key staff members since your potential buyer will likely want to keep current valuable employees.
2. Tune up your financials.
One crucial point you might not be aware of when preparing your business for sale is that the sale is not completed once you receive the money in the bank – a buyer will probably want you to stay after the sale and “earn your way out.”
Gather your professionally prepared financial statements, including profit and loss statements (P&Ls), balance sheets, accounts receivable, accounts payable, and cash flow forecasts.
Explain your past spending habits, especially owner expenses that may have been charged to the business. Eliminate private company expenses and recast past results with a reasonable story. Next, implement more robust financial controls. Prepare a realistic and believable forecast model that shows a path to improved profitability.
Prospective buyers want to understand how organized you are and every detail about your business, from internal operations to external sales procedures.
3. Strengthen key relationships and seek professional advice.
Maintaining good communication within your key relationships is critical in achieving the desired outcome as you prepare your business for sale. Also, please don’t hesitate to seek outside guidance from your attorney, tax accountant, business valuation expert, business broker, and a business coach like myself.
As you will likely encounter tricky issues, it’s a good idea to get insights from several professionals. The goal is to maximize the value of your business, and help from strategic resources will help you reach that goal.
Preparing your business for sale can seem daunting and, at times, emotionally and mentally exhausting. However, the more time and effort you put into getting your business ready for a new owner, the more attractive your company will become to potential buyers.
If you are serious about selling your business and would like more advice from a business expert, please contact me so I can help you develop a preparation plan.
Coach Dave
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