Have you thought about your goal for 2020 and your future dream sale price?

It’s a worthwhile exercise to do and can even be quite confronting. Most of us pour our heart and soul (and money) into establishing and growing our businesses, so the thought of getting it ready to hand over to someone else can be daunting. But, like anything in life, the more we plan and prepare ourselves, the greater our chances of success.

Which leads us to this week’s GROWisdom, taken from from the genius J.R.R. Tolkien:

“It does not do to leave a live dragon out of your calculations, if you live near one.”

Every business, no matter how successful, has its dragons, those areas that pose risk or threaten our success. The more we can account for these in our sale package, the closer we’ll get to the top-dollar we want for our hard work.

 

Read on for three top tips on slaying the dragons.

 

1. Don’t make it about you

Do you work for your business? Or does your business work for you?

it might feel like a bit of a blow to the ol’ ego, but the reality is the less important you are to your business, the better for you in the long run! This is because if you want your business to be sellable, you need it to thrive without you.

The less reliant your business is on you being there, the higher the return you can expect on your investment.

 

2. Get your systems in order

Much like a house-hunter walking into a doer-upperer, someone looking at business in disarray is going to want a bargain. They know there’s a lot of investment they’re going to have to make post-purchase to get things up to scratch. If you’re wanting top dollar, you’ve got to do the reno work on your business before you put it on the market, by making sure all your systems are in professional order and looking ship-shape.

Items you should be able to present to a potential buyer include:

  • Business plans
  • Organisational Structures
  • Financial controls and KPIs
  • And detailed systems for EVERYTHING including marketing, sales, operations, HR, Admin/IT and Finance.

 

 

3. SWOT yourself

In the sale of anything, we want to accentuate the positives and eliminate the negatives. A simple strengths, weakness, opportunities and threats (SWOT) analysis on your own business can help you do just that.

Take stock of the weak points in your business, work out what you can afford to improve prior to sale and outline a smart plan of action for anything left incomplete. Being presented with a considered plan of attack will reduce any feeling of ‘unknown’ for a buyer and offers reassurance that affairs, whether complete or not, are under control.

Think of things like the lease on the office space you rent. Is your current term due to expire? If so, do your own negotiations with the landlord before you put it up for sale, so your potential buyer knows what they can expect should they choose to renew.  Is a long-term supplier looking to shut-up-shop? Present a potential buyer with a list of other credible and competitive suppliers they may wish to continue trading with.

The less thinking (and worrying) a buyer has to do, the better your return will be.

As you can imagine, there’s so much more we can and will share on this topic, so stay tuned for more GROWisdom on priming your business for its biggest trade yet. Looking at selling your business? Check out our partner, LINK, who are expert brokers!