If you have made the decision to sell your business, you must do everything possible to get your business ready or it can reduce your chances for having a successful sale. Anyone who shows an interest in your business must be able to see for themselves that it is a money-making opportunity for them. Throwing up a sign that states “Business for Sale” or putting up an ad on Craigslist is not going to be all you need to do to sell your business. The key to a successful sale will rely on your ability to create a strategic plan to insure you receive a high valuation and get the most for your business. This plan must be carefully formatted and adjusted for your own business needs. However, the following are just a few steps you can take to increase the likelihood of a sale:
Create Your Own Exit Plan
Many business owners are so involved in the operation of their business that the business is not able to survive without them. You must have a plan for exiting your business without putting it in jeopardy. If you have employees working under you, be sure that they can operate the business without your own involvement. If you are the sole operator of your business, be sure that you have created an operation manual that is easy to understand so that anyone could quickly take over without harming the business. The last thing you want a prospective buyer to think is that the business will go under without your knowledge and management. The knowledge and experience you have gained must either be passed on to your employees or be able to be reproduced by someone else easily.
A Thorough Documentation and Understanding of Finances
Along with thoroughly understanding the finances of your company, you must also have everything documented for potential buyers. What you know and what is the truth must be able to be seen by the buyer. Along with documentation of your finances, you must be able to provide them with a realistic forecast of future projections and be able to support them. Where do you expect the business to be in a year or five years and how you came to this figure is a must if you expect to have a successful sale. If this information is not accurate or realistic, or the buyer is not provided with this information, you cannot expect them to be able to see your vision. In turn, they will lose interest in your business as a potential money-making opportunity and you will lose out on the sale of your business.
Provide Them the Data You Collect
It is also imperative that serious buyers are provided with all of the data you collect on your business so they can have an accurate depiction of how it is currently earning profits. Create a VDR – Virtual Data Room and provide them access to your information. A VDR is a centralized location online where all of the documents necessary for buyers to have access to are available. This VDR provides each serious buyer with confidential information pertaining to your business. Without the creation of a VDR, you will be putting your business at risk for a lost sale. Companies who deal with mergers and acquisitions consistently rely on VDRs to get the information they need to make educated decisions. No matter how large or small your business is, a VDR could make the difference in whether or not it sells.
Potential buyers for your business are going to rely on your ability to show them your vision. A VDR is going to assist your prospective buyers by allowing them access to all of the documentation they need to make the right decision to buy your business. Also, it is imperative that you prove to them that your business can successfully operate without you. Too often, a business is created by an individual and the business cannot survive without them. It is imperative that buyers can see this or they will not see that the business is a money-making opportunity for them. As long as you incorporate the above steps into your strategy to sell your business, you will help to insure the successful sale of your business.