Increase the value in your business for sale, at some point in the future.
At some point most business owners will consider retiring or moving on to a new career, therefore careful planning should be put in place to ensure your business is as appealing as possible to the potential buyer. Preparation is the key to increase the value in your business for sale successfully and the longer you have to prepare the better.
So before you jump in and list your company or small business for sale a few things need to be looked at, such as reducing costs and increasing turnover.
Reduce all costs associated with your business, right down to the smallest paperclip. In other words, shop around. Just because your usual supplier gives you a great deal already, doesn’t mean there isn’t a much better deal elsewhere that could potentially save you thousands.
This also applies to your procedures. Streamline everything where possible to avoid costly and time consuming mistakes. Your time is more valuable when selling your services or products rather than constantly fixing problems that could have been avoided.
Tip: Most business sales look back at a 3 year period so the earlier you start the better. Most sales are based on E.B.I.T., the net profit you receive as an owner.
How to increase the value in your business for sale
Involve staff in procedure improvements
Keep focused on the end goal, tweaking and changing where necessary and have the next goal ready to go as soon as you’ve completed the first.
Ensure improvements are planned and all staff members are apprised of the new procedures. Regular brainstorming meetings with staff are a fantastic way to improve business where all those involved debate and question others ideas.
New research calls this method, ‘dissent and criticise’. It generates twice as many new ideas than the standard brainstorming which does not allow analysis of the idea from start to finish. When we are forced to find flaws in a concept we are also then forced to find better equipped solutions. Failure is not to be feared, it feeds our imaginations to strive for more.
Tip: A business less dependent on an owner/key person is far more desirable for a buyer, so always try to delegate to others and work on your business.
Marketing and selling your business and products
Believe me, marketing and selling your business do not mean the same thing.The NAB has some other areas for you to consider in this article on “How to increase the value in your business for sale“.
Marketing is all about advertising, promoting, showcasing and detailing your products or services, whereas selling is the follow up, the follow on if you will. It’s completing the whole picture for the customer who saw your advertising and came to see ‘IF’ they might buy. It is then your job to sell.
A positive sales team more often than not will sell the product every time and word of mouth referrals will follow. Equally, word of mouth from poor customer service will also follow your business so look after your customers the way you would want to be looked after.
Tip: A business with a strong online presence is a better option for a buyer, as a back up for client or other referrals.
Acting on what your customers want?
Keep up to date with products customers need and are requesting along with keeping up to date with today’s technology. Move with the times and don’t be afraid to change. Compare your products and services with surrounding business to ensure you remain competitive and review your profit margins on all products and services. Increase or decrease according to how they rate.
Tip: If you’re in a low margin business, focus on service to differentiate yourself.
When it does come time to list your business for sale, a well organised, profitable business should provide you with the price you need to move on to the next stage of your life.
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