You’ve spent years building your business and realize that the day has come to sell your business. You may be planning to switch industries, retire or reinvest in a new company. Whichever reason you have to sell your company, the process can be challenging.
A crucial part of the selling process is finding the right buyer willing to do right by your employees, customers, and suppliers even though there are likely some complex changes that need to be made. How can you best prepare your business for finding the right buyer?
Here are three steps to help you prepare to sell your business:
Step One:
A prospective buyer will look at how your business is trending. The most desirable trend is a growing business that will command a higher price than a downward trending company.
An option that you could consider would be to create a new sales initiative for your employees or increase your sales team. It is also vital to accurately record all income and expenses in your financial records.
Your business will become more attractive to buyers when you show a growing company with immaculate records.
Step Two: Reduce Your Influence in the Company
Reducing your role in the business may be one of the most challenging but most important steps in preparing for the sale of your business. You need to reduce your part in the company so that your management team can come forward. With that being said, you will need to create a strong management team if you do not already have one.
Naturally selling the business means you won’t be in the driver’s seat anymore, as someone will be taking over. The transition will be easier once you’ve stepped back and let others lead.
A new go-to contact for employees, customers, and suppliers that isn’t you will need to be decided. Establishing the reporting structure now will make the process more streamlined at the time of the sale.
Step Three: Turn Excess Inventory and Assets to Cash
Sitting on old inventory that needs to have been sold is easy for a company to do. If you have been the business lead for many years, there may be excess inventory in storage.
Typically, there will be low interest for a buyer to pay for old stock, now would be a good time to liquidate it and turn it into cash for your company. Before you sell, get your inventory down to the level needed for regular business operation.
Do you have old equipment or assets gathering dust? If you answer yes, it is time to sell them. If the items lack retail value, sell them for scraps or dispose of them.
Just the Beginning
The three steps we have discussed are essential, but there is still more you need to know. There are nine steps to preparing for selling your business that we recommend. Get the guide for free now!
You will need the right brokerage to partner with you and assist you in finding a competent buyer for your business. Working with Murphy Business will connect you with determined, highly-qualified buyers ready to take on your company. Ready to get started? Contact us today!
