You’ve spent years building your company, but the day has come. It’s time to sell your business. Whether you’re planning to retire, move to a different industry, or reinvest in a new company, selling your current business can be challenging.
It’s important to find a buyer who is ready and willing to do right by your customers, employees, and suppliers. However, there are also likely hard changes to be made. How can you prepare your company for sale and get the right buyer?
Here are three steps to help you prepare to sell your business:
1. Build Your Revenue
A buyer will look closely at how your business is trending. A growing business is more desirable and will command a higher price than a stagnating or downward-trending company.
Consider creating a new sales initiative for your employees or bumping up your sales staff. Also, make sure that every dollar of income and expenses is recorded accurately in your financial records.
When you have a growing business with impeccable records, your company will become much more attractive to buyers.
2. Reduce Your Influence in the Company
This may be one of the hardest, but most important, ways to prepare for a business sale. You need to reduce your role in the business so that your management team can step forward. If you haven’t created a strong management group, this is a great time to do so.
Selling the business naturally means that you won’t be there to call the shots. Someone else will be taking over. The more you’ve stepped back and let others lead, the easier the transition.
Employees, customers, and suppliers need a go-to contact that isn’t you. Set these reporting structures up now so that when you sell, the process will be seamless.
3. Turn Excess Inventory and Assets to Cash
It’s easy for a company to sit on old inventory well after it should have sold. If you’ve been leading the business for a number of years, there may be a lot of excess inventory in storage.
Generally, a new buyer isn’t going to be interested in paying for old stock, so now is the time to liquidate it and turn it into cash for your company. Get your inventory down to the level it needs to be for normal business operation before you sell.
The same principle applies to business assets. If you have old equipment you’re not using anymore or other assets that are gathering dust, it’s time to sell them. If they don’t have retail value, sell them for scrap or parts or dispose of them.
Just the Beginning
These three steps are essential, but there’s more you need to know. There are actually nine steps we recommend to prepare your business for sale. Get the guide for free now!
Once you’re ready to sell, you need the right brokerage to partner with you and help you find a qualified buyer. Don’t waste your time with people who are just practicing their valuations or “kicking the tires.”
When you work with Murphy Business, we can connect you with serious, highly-qualified buyers who are ready to take action on your company. Ready to get started? Contact us today!