3 Practices to Get Your Business Ready for Sale

Get ready

To sell your business

Are you looking to sell your business? Read through to learn a couple of things you'll need to do to get it ready for the big sale.

Let’s get your business ready to sell

A record number of businesses were sold in 2018. Four percent more businesses were sold that year than in 2017. 

Selling a business is a lot like selling a home. It's something you've put a lot of blood, sweat, and effort into, and it takes time to prepare for an exit that makes it all worthwhile. 

More often than not, your employees can't come with you once you've sold your business, and that alone can make selling a business rather bittersweet and difficult when it comes to making sure they stay on board with a new owner so you can get through a successful exit.

If you're wondering how to begin to get a business ready to sell, we can help with that. Keep reading to learn our three ways to start the process of selling a business. 

1. Get a Business Ready to Sell by Boosting Your Brand

The more brand awareness you have, the more valuable your company is to potential investors. Here's how to boost your company's brand:

Appearance

All your marketing and branding efforts should have a consistent and attractive look to them. 

Visibility

Customers and buyers alike should be able to find your company online. Make an effort to get your website ranked first on searches. 

Integrity

Clean up any problems your business has going on. That includes any scandals, lawsuits, or scam reports. 

Potential buyers want to know you and your business are honest. 

Followers

You can't just post every once in a while on social media. You must have an active profile and accumulate followers. 

The more customers who are loyal to your brand, the more successful your business becomes. And buyers are purchasing not just your office space and products or services, but your customers as well. 

2. It's About Timing and Knowing Your Worth

Get an appraisal done on your business. You'll not only know the real worth of your business but prospective buyers will want one done anyway. 

But selling a business is all about timing. While you may think you need to sell because your business has legal challenges, is facing bankruptcy or is losing too much money, you'll also attract buyers eager to cash in on your distress. 

It's better to sell when your business is doing well. It's appealing to investors and you walk away with more money in your pocket. 

3. Keep Costs Down

The more costs you can cut, the more profits you'll make. And the goal as a seller is to show buyers a revenue trend that's ticking up instead of down. 

Take a look at your current expenses and find ways to either reduce them or eliminate them entirely. Often, all it takes is a quick phone call to your vendor to ask for a better deal. 

Cutting costs can help show buyers that the business is improving rather than slowing down. 

Get Help

Another way to learn how to get a business ready to sell is to partner with the right business broker. We can help match you with the best professionals for you and your unique business when the time comes.

We'll also help explain the process and be there with you every step of the way. Click here to learn more. 

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PREPARING TO EXIT YOUR COMPANY

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

What's Your Business's Market Value? How to Value a Company

How to Value a Company

What’s Your Business’s Market Value?

Are you wondering what your business's market value is? Read this article to learn how to value a company fairly so you can sell fast and make a profit.

How to value a company

You’re finally ready to sell the business you’ve worked so hard on. The first step of the process is valuing how much your company is worth.

But if you’re new to selling a business, likely you won’t have a clue where to start. Thankfully, there are several ways to work out the market value of your company.

Ultimately, your business is worth whatever you decide it’s worth. But you can make your estimation using various ways to value the company and can choose a mix that reflects your final thoughts.

Keep reading to learn how to value a company.

Work out the Value of the Assets

If you’re wondering how to value a business, the first thing you should do is add up the value of everything the company owns. This includes all the equipment and inventory. Then, you’ll need to remove any debts or liabilities.

After all, a buyer would need to purchase all the same stuff if they were starting the business from scratch, so the company at the very least is worth the replacement cost.

While this doesn’t provide an efficient whole evaluation of a business, it’s a great starting point for understanding a business’s worth. Your final balance sheet will offer a good indication of the value of your business’s assets.

Remember that the company is probably worth a lot more than its assets though. Consider how much revenue and earnings the company pulls in.

Base It on Revenue

This leads us to another method on how to value a company. You can base the value of a company on its revenue.

How much does the company make in annual sales? Work that out and determine, using a stockbroker or a business broker, how much a company within your niche may be worth for a level of sales. For example, it may typically be worth about three times sales.

Explore Beyond Financial Formulas

It’s important not to just base your assessment of your company’s value on figures. For example, maybe the location of your business is extremely sought-after?

Always consider the value of your business based on other factors too, such as geographical location.

How to Value a Company for New Sellers

When considering how to value a company, these are some of the best methods to start with. However, one of the best ways to assist with the process is to consider professional help.

Here at Biznexus, we can help. We help match business owners with the best business intermediaries to help you sell your company for great value, on optimal terms.

The service is free for business owners, and we aim to help improve entrepreneurs’ chances of having a positive experience of selling their business. To learn more about how we can help, check out our website.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

How to Make Your Business for Sale More Attractive to Buyers

How to Make Your Business for Sale More Attractive to Buyers?

Here's how to make your business for sale more attractive to buyers.

Now, more than ever, it's vital to ensure your business for sale is an appealing opportunity for potential buyers by considering these strategies.

Are you finally ready to sell your business?

Whether you started a business in recent years to sell it, or you’ve been attached to it for years, you’ll of course want to sell your company for the biggest profit.

To make your brand more attractive to prospective business buyers, there are several ways to make it more appealing. But where to start?

That’s where we come in to help. Here’s how to make your business for sale more attractive to buyers.

Boost Your Brand

If you’re wondering how to sell a business online, one of the best moves you can make is boosting your brand’s online presence.

Think about it – if you were considering buying a business online, what’s one of the first things you’d do?

You’d go straight to google and search it up, of course. And that’s exactly what your prospective buyers will do too.

Thankfully you get to control what they see. And as you can imagine, the better your brand appears online, the better you’ll be able to sell that brand.

However, if your brand’s online presence needs more work, there are several ways to improve.

At a minimum, your company should have an attractive logo, consistent branding, and a polished website.

Visibility is important too. Does your brand rank highly in Google search? If not, this may put buyers off and it’s worth making efforts to improve your search rankings.

Or perhaps your brand does appear in Google search, but in a negative way? If the first links that appear in the search results include scandalous headlines or scam reports surrounding your brand, then this is an issue.

In such cases, you need to make movements to have these removed. After all, a company that’s attractive to buyers is one that possesses integrity.

Buyers will also check up on a brand’s social media accounts, so make sure your company has these. The activity and following of these accounts are just as important too. Buyers are purchasing your customers, after all, so make sure they can see that you have some.

Promote Your Unique Selling Point

When it comes to selling a business, it’s all about promoting the unique features of your company.

What is your business good at? What makes it special? Whatever the answer, maximize it.

Maybe your company sells a niche product? Or perhaps your brand has a huge following? Or a superstar team?

Usually, a buyer will have one main reason why they’re interested in your business. Sure, there may be lots of features they find attractive but in most cases, there’s one standout quality.

Ready to Put Up Your Business For Sale?

Putting up your business for sale is usually a bittersweet experience. But while it's sad to bid farewell to a company you’ve spent so much time and work on, there’s the sweetness too. And that’s the profit you can make from it!

To truly reap the benefits of this sweetness, you’ll want to make your business as attractive as possible to buyers so you can sell it for the greatest profit.

So, remember to know your worth and take the time and effort to improve your brand’s online presence. You should also promote your selling point as much as you can.

We promise it will be worth it.

If you need help retailing your business, we can help you sell for the highest price. Learn how here.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

How to Choose a Business Broker to Sell Your Business

Finding a Business Broker is Easy

Pick the most qualified is hard. Here is how to choose a business broker to sell your business

Do you think the time has come to sell your business?

If you believe that is the right move, you will need a reliable business broker. They are not easy to find nowadays, so take a look at some tips that will assist you in choosing the right agent for the sale.

Make Sure They Are Qualified

The first thing you want to ensure is that you will be doing business with someone who has the necessary skills. That means you need a broker who has the necessary licenses and qualifications.

Additionally, you may ask them whether they belong to an association or another professional organization in their niche.

Ask About Their Experience

It is not only about selling your company but also about putting it in the right hands. That is why you need an experienced broker with plenty of archived transactions.

Feel free to ask them about their experience across various industries. It is always wise to ask about the details of the latest transactions. Ask them how long it took them to close the deal, and whether you can talk to their past clients as a reference.

Ask Them About Selling Strategies

When meeting with the broker, they should tell you more about how they do things. That includes the strategies they use to advertise your business. It may include placing online advertisements on website marketplaces, as well as sharing on social media, or using contacts to find a potential buyer.

The best brokers out there mix all of these methods to find someone to purchase your business quickly. Additionally, they will make sure to screen the interested parties, and only meet you with serious buyers.

No Upfront Payments

When choosing a broker, you should be wary of those that are looking for upfront payments. The way agents do business these days is that they take a fee from the successful sale. You shouldn’t pay anything upfront as there is no guarantee that they can close the deal.

It is also wise to agree on the fee before you start the selling process. We understand that you want to save as much money as possible, which is why you may not go for the broker that asks the highest fee. However, pay attention to small charges, too.

Brokers often lower the price when they have too many companies to sell, and they don’t genuinely care whether they will successfully sell your business.

Agree on the Selling Price

A broker can tell you an estimated price based on his experience and skills. However, you should do your research regarding different valuation techniques. You can even try to find a business with similar characteristics to yours and see its selling price. That will be an excellent indicator of the cost you should go for when putting your company up for sale.

The important thing is to ensure that the broker will honor the deal. You may agree on the lowest and highest acceptable prices so that they have wiggling room. However, it is mandatory to specify that they won’t go below the lowest cost only to finalize the sale.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Best Practices for Getting Your Business Ready for Sale

Selling Your Business?

Best Practices for Getting Your Business Ready for Sale

Use this guide to help you in getting your business ready for sale.

There are many reasons why people sell businesses, from cutting your losses to cashing out and growing your wealth. Whatever your reason is, you'll need to understand the art and science of getting your business ready for sale.

Having an up-to-date valuation for your business is essential if you're planning to make a sale.

Getting your business ready for sale requires a diligent, scientific approach. 

Learning how to sell a business includes making sure you're handling everything on the legal front while also maximizing your profits in the sale. 

Not sure you're quite ready? No problem! Keep reading for seven tips that will have you feeling like a pro in no time. 

1. Get a Professional Valuation For Your Business

Having an up-to-date valuation for your business is essential if you're planning to make a sale. 

During a business valuation, a credible third party will break down everything from your marketplace value, cash flow potential, and how much you can expect to make in a sale, to an in-depth look into your strengths and weaknesses. 

Accountants or investment bankers will make your valuation as accurate as possible. 

2. Shore Up Any Red Flags and Make Improvements

The last thing you'd want is to give a prospective buyer any reason to balk at buying your business. Be sure that you audit your business for any red flags before moving forward with the sale. 

This means getting rid of any liens or tax issues, and ensuring that ownership is crystal clear. Settle any outstanding balances and legal issues so that they don't bleed into the sale. 

3. Be Clear on Your Intentions For Selling and What You Hope to Gain

Everyone has different reasons for selling their business. Never move forward with the process unless you're clear on your intentions and goals. 

For instance, you might sell the business to retire, dissolve the business during a dispute, or get an influx of cash flow. When you know your goals on the front end, you'll be able to get the results you're looking for. 

4. Analyze and Clean Up Your Books

Without question, your books need to be in order if you're going to sell your business. 

If you don't have clear financial records, no credible buyer will take the chance of purchasing your company. You'll need to have up-to-date books from the past three years, in addition to tax records. 

Piece together your reports and have copies available to buyers. 

5. Put Together a Financial and Legal Team to Facilitate the Sale

In order to get the best from your business sale, you'll need the backing of financial and legal professionals every step of the way. 

Make sure that they specialize in mergers and acquisitions, and that you use M&A analytics tools for due diligence. In the meantime, ensure that you're staying on top of your business matters so that your company doesn't falter while you wait for the sale. 

Follow These Tips When Getting Your Business Ready For Sale

Getting your business ready for sale requires a diligent, scientific approach. 

Using the strategies listed above will help get the end result you desire.

Looking for more professional help? Reach out to learn more about how to get your business ready for sale on your terms. 

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Mistakes to Avoid When Selling Your Business

Mistakes to Avoid When Selling Your Business

To ensure a successful transaction

Are you selling your business? If so, make sure you avoid the mistakes listed here to ensure a successful and profitable transaction.

Selling your business?

In 2018 there were 30.2 million small businesses in America. In 2015 small businesses employed 47.5% of the private workforce in the U.S.

But there comes a time in every entrepreneur's life when they are ready to move on and sell their business. While the reasons for selling your business may vary, the goal is to walk away with a tidy profit. 

You have to know what you're doing to ensure you sell your business for the most money. And there are tons of mistakes you can make. 

If you're looking to sell your business, keep reading. We're sharing with you the biggest mistakes entrepreneurs make when selling a company. 

Always Be Prepared Before Selling Your Business

Just like a well-thought-out business plan can help you grow your business, you need to do the same with your exit strategy. It's hard to get exactly what you want when you don't know what that is. 

Collect Your Documentation

You'll need to gather a few key pieces of information in order to sell your business successfully such as:

• Financial documents

• Sustainable profitability projections

• Identify and address lease issues

• Identify and address staffing problems

No one wants to buy a business that isn't well run and well organized. This information will also help you set the price for your business that's on par with the current marketplace. 

Plan Ahead and Start the Process Early 

If you really want to be prepared to sell your business, begin the preparation process at least two years before you list it for sale. 

Qualify Your Buyers

Another common mistake is not properly pre-qualifying prospective buyers. While you may think that qualifying a buyer too soon will scare them off, usually the opposite is true. 

Instead, the pre-qualification process helps draw those buyers deeper into the sale. If you're worried about giving buyers access to sensitive information, have them sign documents such as a confidentiality agreement and financial background information. 

This process will help you attract only serious buyers which means you won't waste your time wooing the wrong buyers. 

Hire the Right Team 

While it may seem like a good idea to try to save some money when selling your business by not hiring professional help, it's usually not. There's just too much at stake. 

An investment broker and/or business broker can help you present your company in the best light. 

How a Broker Can Help

They know exactly which databases to advertise your business on. They also know how to do the following tasks:

• Preparing documents

• Identifying buyers

• Generating interest

• Soliciting offers

They'll also help close the deal as quickly as possible.

How Other Professionals Can Help

But you may also want a transactional attorney to help with the following tasks:

• Preparing an asset purchase agreement

• Negotiating an asset purchase agreement

• Handling documentation such as bills of sale and officer certificates

An accountant can help you structure your deal and help you plan ahead of potential taxes you'll have to pay. And a business appraiser can help you evaluate your business so you know what it's really worth. 

Work With Us

Selling a company is a difficult process. It's important to surround yourself with the right team to help you save time, money, and prevent potential problems from arising. 

We can help. Our team of knowledgeable experts can help make selling your business easy. Click here to learn how. 

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

The Best Exit Strategies for Your Business

Top 4 Tips To Exit Your Business

Best exit strategies for your business

Is it coming to the time when you can no longer run your business? It's important to have exit strategies planned. Whether you're looking to retire, get out of an industry, split with partners or just don't want to run your business anymore, proper exit strategies are a must. Getting the help of a business mediator can be an incredible value-add if you're looking to exit a business where that may get sticky with existing partners.

Subsequent comprehensive studies can cost you upwards of $35,000 depending on the size of your business and what type of player you intend to sell your business to (private equity or family office, for example). Consider How You're Going to Sell, Transfer, or Liquidate the Business and your Ownership Interest. Many people seek exit strategies not just to get rid of a business, but to start a new professional and personal lifestyle.

Exit strategies are absolutely necessary when you're making a transition with any business.

By finding the strategy to help you in this regard, you'll create a clean transition that is beneficial for whatever your step is. Let's take a look at a few strategies that'll help you out. 

1. Explore Mediation if You Have Partners and Want Out

Getting the help of a business mediator can be an incredible value-add if you're looking to exit a business where that may get sticky with existing partners.

They'll work with you and the other parties in your business to be sure that you're able to leave the company and dissolve your ownership in a way that works. This can include facilitating settlements, scheduling meetings, and conference calls, and helping to maintain privacy and cooperating during mergers and acquisitions. 

By touching base with some third-party mediators, you'll be able to engineer the best agreement for your company's needs.

2. Have Your Business Properly Valued

There are an exponential number of candidates out there who could be ready and willing to buy your business if you can produce accurate historical and financial information. 

You'll need to get a proper valuation as a first step towards this to know where your company stands and how you can ensure a positive return on your investment come selling time.

A proper preliminary analysis of your business should cost you between $3,000 and $10,000 in most cases. Subsequent comprehensive studies can cost you upwards of $35,000 depending on the size of your business and what type of player you intend to sell your business to (private equity or family office, for example).

By starting with this type of professional analysis, you'll learn how much your company is worth, what sort of sales price you can expect in today's marketplace, what strengths and weaknesses your business currently has, and so much more. 

3. Consider How You're Going to Sell, Transfer, or Liquidate the Business and your Ownership Interest.

What's the end result you're shooting for?

When you can answer this, you can reverse engineer and decide your best course of action to take today to start moving towards that.

For instance, if you are just trying to cut your losses and get a nice check for your troubles, selling out might be best. If this is more of retirement and you'd like to pass the business on to your family, it'll involve facilitating a transfer. 

If your business has a lot of assets, liquidation could be best.

Get the advice that'll steer you in the right direction. Above all, be sure you know what your next "pivot" is. 

Many people seek exit strategies not just to get rid of a business, but to start a new professional and personal lifestyle. It's easier to get through to the other side when you are honest about what you want next. 

4. Get the Help of a Business Lawyer

Finally, you'll always need another set of eyes for the legal end of things. 

This way, you're able to protect the sale or transfer and can weigh every potential downstream implication of negotiating points as they come. Research some business attorneys early in the process so you can get the assistance you require. 

Consider These Exit Strategies

Exit strategies are absolutely necessary when you're making a transition with any business. Use these four tips and you'll be taken care of.

If you're looking to sell your business or explore other options, let these points guide you.