Selling a Business
Things to think about pre listing
Planning for the eventual sale of your business should begin well in advance of the sale date.
There are preparatory steps you can take to help maximise the value of your business and assist with a successful sale. These include:
Having a clear and concise, current Income & Expenditure Statement is an invaluable selling tool and sends a signal to potential purchasers that your business is well run. Regular cash flow reports which show where income is coming from and where it is going are also important.
To maximise the sale price of a business it is important to account for every dollar of income and eliminate personal expenditure from the business’ accounts.
Take a close look at any contracts with suppliers or customers. Those that would be beneficial to a new owner should be locked in and extended if possible.
If you are leasing equipment, look at the rationale of the lease(s) from a buyer's perceptive. If a lease will saddle the buyer with an interest rate well above very low current rates and any tax advantages have already accrued, the lease may hurt the business’ value.
Your company will be more saleable if procedures are clearly systemised and documented so that a competent owner or manager can take over with minimal training. Get it out of your head and into an operations manual and make sure procedures are tested and refined before the sale.
You should also ensure you have a long-term strategic plan. This indicates to purchasers that the business knows where it is heading.