“Always be ready to sell.” Co-hosts Matt Purcell and Matthew Holland talk to Business Sales Specialist, Paul Smith, from Mentored Business Sales about how SME owners can prepare their business to ensure they get the best price possible.

This post will include the following:

• What you need to have ready to sell your business
• Why it’s important to be prepared
• What you can do today to help your business sell
• Takeaway tip

 

Make sure you’re sale ready

Having your business ready to sell is absolutely paramount and can honestly be the difference between selling the business and not selling it. In most cases, it increases the value substantially and has been known to double what the business is worth.

Being exit ready is something you want to be thinking about from day one, making sure you have a well structured business with everything manualised. This is vital because if something happened to that person running the business and they were holding the knowledge, that business is going to lose all of it’s value. Your business, your idea isn’t worth anything unless it can be executed. So, if you’re in business and you reckon you’ve got some sort of talent and skill in the delivery of your idea, then you make sure that you write every step down.

It’s all about having your financials ready and your systems and processes in place. An important note that Paul mentions, is that being transparent is key to selling your business, because if someone is going to buy into your venture, they will want to know every single detail about how it operates and how successful it can be.

The quality of the business is really what determines the multiple of that business and inevitably what it’s worth. When it comes to selling, Paul suggests it’s all down to good systems and financials, as well as having high potential. That’s what’s going to make your business attractive to potential buyers – organisation and opportunity.

 

So, where do you start?

Getting your business ready to sell can be an intimidating process, because there really is a lot of information that you need to get ready. However, as long as you’re prepared, it’s really just a matter of keeping everything documented.

Whilst this is something you can do on your own, it’s really important to get professional advice. These people know exactly what it is buyers will look for and can help you check everything off so you know you’ve got everything prepared. This is absolutely essential because if a buyer doesn’t have all the information straight away, they are likely to lose their confidence in the business, and as soon as they lose confidence, they will lose interest.

It’s good to get a checklist completed so you’re aware of the knowns and unknowns of your business. Things you should be checking for include:

• Your financials (P’s & L’s)
• The lease
• All expenses (including owners wage)
• Trading history
• Systems in place
• Procedures – Staff
• Operations manual

 

Takeaway tip

If there is one bit of information to take away from this post, it should be that you’ve got to be prepared. Try and make your business clean, tidy and presentable. If you want the best deal, it doesn’t matter how great your idea is, buyers want to see structure and organisation.