A business with a steady customer base or a unique value offering is certain to generate at least a couple offers if put up for sale. The challenge is in generating maximum value for a business without investing too much in the company immediately before selling. It is important to recognize the fact that preparing a business for sale and maximizing the sale price will take some patience and effort. There are some specific steps you can take right now to maximize your company’s value. Put in the work to prepare your business for sale and you just might be inundated with offers well in excess of your expectations. Here’s how to do it.
- Obtain a Professional Valuation
Your subjective opinion of your company’s value will not match that of an objective professional. Have a formal valuation of your company performed by an unbiased professional so you finally know what it would go for on the open market. The appraiser will consider business assets and debts, inventories and plenty more to determine the company’s true value.
- Organize the Numbers
If your company’s financials are a mess, it will be difficult to attract bidders. Assume prospective buyers will evaluate the books in-depth before bidding. Clean up your books, conduct an audit and review all of your assets for potential sales before making the business available to prospective buyers. Every aspect of your company’s financials should be formally documented for easy review.
- Boost Sales
Businesses with steady streams of income and several sources of revenue are that much more appealing to potential buyers. Boost your company’s sales and you will receive more bids when you put it on the market. If your sales are declining, wait until they stagnate or increase before accepting offers. Otherwise, it might prove difficult to get market value for your business.
- Exit at the Right Time
Start planning the company’s sale and your exit a year or two ahead of time. You can check various exit planning strategies , selling a business checklist or have a consultation with a business broker. Prepare in advance and you will have a window of opportunity to spike sales, organize financial records and bring that many more new customers into the fold. In other words, proper timing will ensure optimal marketability to prospective buyers.
- Connect with a Business Broker
You will need a business broker to maximize the value of your business. A business broker will also help you connect with the best prospective buyers. This professional will assist with business valuation, the negotiation process, performing due diligence on the sell-side, pinpointing buyers, vetting interested parties and so much more.
- Negotiate with Qualified Bidders and be Decisive
If you spend your limited time negotiating with those who have not yet secured funding or those who refuse to put a timetable on the purchase, you might be wasting your time. Make sure each bidder is capable of backing offers with the appropriate financing before committing an extensive amount of time at the negotiating table. If you receive an offer from a qualified buyer that meets or exceeds your initial asking price, do not hesitate to accept it. Accept a few bids in a designated period of time, allowing interested parties to modify their bids, choose the best offer and you will have done your part to maximize your company’s value.
