affect this possibility. Increasing sales or at least flat sales make for the best time to sell. If you had a down year and can wait several years to have at least two improved tax returns you might want to wait to get top dollar for your business. If you don’t want to wait or don’t have the energy, consult your professionals and see how much the down year may hurt your value. STEP 5: REDUCE HEAVY CUSTOMER CONCENTRATION. Depending on in-
The 9 Steps to Make Your Company Saleable … and Valuable. THE Y AL SO APPLY IF THE PL AN IS FOR YOUR FAMILY TO CONTINUE YOUR BUSINESS .
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t some point, every business will need to transition, either to a new owner or close down. Most owners do not have a succession plan in place. One important part of a plan should be to properly structure your business for a sale.
STEP 1: HIRE PROFESSIONALS.
There are people who specialize in helping business owners prepare their business for a sale. A business broker knows all the processes for accomplishing this, and should have good referrals to other professionals who can help in the process. Your accountant should be able to help you get your books in order. An attorney can help you structure your business in the proper fashion. If your company needs a lot of cleaning
up, it may be necessary to hire a consultant to help. The business broker is generally only paid when you sell. STEP 2: KNOW YOUR VALUE. A busi-
ness valuation will help in your decision as to when to sell and what work you may need to do to optimize valuation when it is time to sell. Third party appraisers can usually do this for a few thousand dollars. A business broker will often do this free of charge, and a local broker should have a good feel for your business geography as well. STEP 3: DON’T BE EVERYTHING TO YOUR BUSINESS! When businesses are
small this can be difficult. But the more you can build your business to run with you being less important, the easier it is to sell and the more desired it is. STEP 4: SELL WHEN SALES ARE UP.
dustry, anything over 25% of your business coming from one customer can be a large negative. Even if you have a great customer that is a big percentage, continue marketing to new business prospects to negate the risk of losing that customer. STEP 6: SCALABILITY. Buyers usually buy a business to grow it. Have plans and options for growth, even if you are not going to implement them yourself. Limited opportunity can turn a buyer off. STEP 7: GOOD DATA. A buyer needs to be able to see an accurate picture of the finances of your business. Keep your books up to date. Run your cash through your business. If you have questions as to what profit and loss items might hurt a sale, ask your business broker to take a look at your financials. Have an operations manual in place. It’s easier than you think. Just make an outline of all the important processes to run your business, and then fill in the details. STEP 8: LEGAL PROBLEMS. It can be hard to impossible to sell a business with legal liabilities. While any business owner can experience nuisance problems, always address important legal issues, and resolve them as soon as possible. Consult your attorney, and handle this correctly. STEP 9: PLAN AHEAD! You never know when you will need to sell or when it will become the “right time”. So don’t wait. Understand these steps and get help. Remember that a business broker should be able to walk you through this whole process, and their help will pay off for you in the long run.
For many businesses 2020 could severely JEFF BACH is part of the team of top business brokers in this area at Fusion Business Brokers. Fusion Business Brokers combines the highest levels of technology, marketing and professional experience for the needs of business owners. With access to their large network of qualified buyers, Jeff offers the best opportunity to help you successfully sell your business. He only gets paid when you sell. Valuations are
free and are the starting point to knowing when the right time is to sell your business. Jeff can also help qualified buyers find and buy a business that meets their goals. You can contact Jeff for a free, confidential, no-obligation discussion about selling your business or buying a business at 314-941-8530, or by email at jbach@fusionadvantage.com.
