Deciding how to sell your business may be one of the most important decisions you’ll ever make. Selling at the right time, to the right buyer for the right price could bring you financial freedom and future security. Equally, it can be a difficult process with no guarantees of getting the outcome you want.
We can help with some practical advice on how to approach selling your business.
The Key: Start Today
When should you start planning to sell your business? Smart Financial’s COO Dr. Mark Todman weighs in: “The short answer is the earlier, the better. The long answer is the earlier, the better… I believe you should build salability into the very heart of your business, as you are starting out.”
Why the earlier the better? He continues, “The real benefit [to this] is that it opens up a number of options, not merely regarding your business but your personal aspirations.… A valuable business can provide a financial freedom and security you need to live the life you want.”
Building Value
If your business currently isn’t worth as much as you need it to be worth, you can take some steps to start building its value. Here are a few good ways to do that:
No matter how small your business is, you need to make yourself recognizable to customers at a glance and separate yourself from your competitors. When you become a leader in your industry AND you have brand recognition, you can gain monopoly control.
What have you done in the past to grow your business’s revenues, and what is the potential for future growth? You’ll need to clearly illustrate this to potential buyers when the time comes.
If the business can’t run without you, or if you depend on one employee to run things for you in your absence, you’ve just nullified any value your business might otherwise have. No buyer will make a decent purchase offer if they can’t also walk in and start running the business right away. If that’s to happen, you must have responsibilities diversified so that your employees are trained to run the business in your absence.
Similarly, don’t depend on one vendor or client to provide most of your stock or profits. Diversify your customer and supplier base to make your business truly sellable.
So How Do I Find the Right Buyers?
If you’re confident of demonstrating the value of your business, you’ll need to put some groundwork into attracting the right buyers. Start with these three areas:
Buyers want a business with an established, happy customer base. Ask your customers for referrals for new business, valid reviews, and honest testimonials. Put reviews and testimonials on your website and in promotional materials that potential buyers will see.
Let PR experts transform your information into compelling copy that you can then use on industry websites, forums, blogs, and other publications.
If you happen to run into a potential buyer at an industry conference, are you prepared? Do you have a pitch ready that lasts only a couple of minutes, but will showcase just why your business is valuable and a good buy?
One way to create your elevator pitch is to identify a problem, clarify how your business will solve this problem, and then describe your business’s potential for growth. Practice this pitch until you know it well and it sounds natural; that way, you’ll be prepared if the right buyer unexpectedly makes contact with you.
We hope you’ve found this blog useful! If you’d like more information about building sellability into your business at any stage, download our free guide below for 11 ways to do this.