How to Prepare Your Business for Sale
Did you know that knowledgeably preparing your business for sale can measurably increase its value? Here are just a few areas on which to focus:
Buyers rarely invest in stagnant or declining businesses. Steady growth and a stable track record attract attention.
Earnings multiples are typically the major value indicator. Selling more, spending less, belt-tightening and a clean balance sheet all drive higher sales prices.
Nurture, Expand Your Customer Base
A roster of long-time, reliable, repeat clients is ideal. An overly-concentrated customer base – one key client representing more than 15% of your business — can raise red flags.
Identify Your Team
In most cases, sellers want to keep a pending company sale confidential. Still, it’s important to quietly identify your key “lieutenants” and employees. Tenure and commitment are typically attractive to buyers.
Update Financial Systems
Make sure your ERP and CRM systems are clean, comprehensive and current. Proprietary software is a plus.
Time It Right
You may not think it’s time to sell, but a low interest rate environment, combined private equity funding often fetches higher prices for the seller. And again, you can’t start your preparation too soon!
We sell businesses and can help you prepare. Our team of tenured consultants – attorneys, accountants, appraisers and more – helps optimize the value of your business for sale, focusing on the Three Cs: Confidentiality, Competence and Character. And we capably guide entrepreneurs through each step of our proven sales process.