Selling your business is one of the most important transactions you’re likely to make and yet it’s often a process that is overlooked until the very point you are ready to sell.
Although it might sound premature, the truth is you should build value and sellability into the heart of your business as you’re starting out, long before you reach that point.
Doing so opens up a number of options, not merely regarding your business but your personal aspirations. After all, a valuable business can provide the financial freedom and security you need to live the life you want.
Give yourself and your ambitions the best chance possible by creating something of real value that will attract the right buyer, and more importantly, the right price.
Many businesses make the mistake of relying too heavily on one client or supplier so make sure you have an even spread of revenue. Relying solely on one third party could make your business seem like too much of a risky purchase.
Build a strong management structure – you’d be surprised how many business owners are the most irreplaceable cog in the machine. When they leave for any reason, the machine grinds to a halt.
This kind of setup is incredibly off putting to an acquirer, making your business look too unstable to function without you.
Exit planning plays a big part in sellability. A buyer wants to know they are getting a secure business in a smooth transition.
Putting together a sound exit strategy will reassure potential buyers that you’ve done the important thinking ahead of your departure.
The Importance of Sellability
Remember, finding the right buyer can potentially take years, and the last thing you want is to be under pressure to accept an offer. Conversely you could be made an offer for your business at anytime. You don’t want to be made an offer for your business that falls apart once the potential acquirer enters due diligence because the business hasn’t been built to sell.
Plan ahead, build sellability in as you go and when you are ready to exit, you’ll have something valuable to attract buyers with – and something you can be proud of.
What do you think? Do you think we’ve encapsulated the importance of sellability?