There’s no absolute right or wrong way to sell a business, and there will always be exceptions to prove the rule, but, if you want to be as sure as you can of the best outcome, here are my suggestions of the necessary groundwork.
If you were going to sell a car, would you expect to get the best price if the MOT had run out, you had lost the service book, the tyres were worn and the whole thing needed a good clean? No. In the same way that you wouldn’t entertain buying something in that state for yourself. So why do so many people think that, just because the engine of their business is running OK, it will be a great buy for someone else?
There’s nothing different about selling a business than selling any other valuable asset, such as a car, a house or a racehorse, except that, unless you’re a serial entrepreneur or a billionaire, most people will probably only ever sell one business in their lifetime. It’s your life’s work, your baby, your pride and joy; so don’t you owe it to yourself and your business to present it in the best possible light to prospective new owners?
The first thing to think about is timing. If you want to exit your business next year, but haven’t yet taken any action towards it, you’re already a couple of years too late. You will never realise the true potential of your business if you rush into it. Selling a business needs to be a planned process with all your actions as a business owner, in the time before and during when your business is marketed, being focussed on showing your business in its best light.
That means reviewing the root and branch of what you do and how you do it; looking at it from as objective a viewpoint as you can. Your organisational structure needs to be robust and to prove that every decision does not begin and end with you. If your aim is to exit the business but you currently do everything, change it. Make your most trusted employees become more involved in decision making. No one is going to buy your business and have it fall apart as soon as you exit the building!
Your policies and procedures need to stand up to scrutiny with any outside accreditation, such as ISO9001 or Investors in People, being a real help here. You need to have all your accounts up to date and in a format that can be easily followed by a serious prospective buyer when you get further down the line. But you also need all those other things you filed away years ago: your certificate of incorporation, your company register, your share certificates and your company seal. They are like your car logbook; if they’re not available, it makes people question if everything is as it should be.
Finally, you need to be able to present what you do, how you do it and why you stand out from your competitors in a clear, concise and compelling way. If that is not your area of expertise, don’t be afraid to ask an expert for help. It will pay off in the end if you can make the absolutely best case possible for your business. Want to know more? Send me a message or email help@barbarastopher.co.uk
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