How Can I Maximize Sale Value When Selling My Business?

For most business owners, selling your established business is the last thing you’d want to do. However, things don’t always go as planned. Take the global COVID-19 pandemic, for example. Many businesses were shut down for good during the pandemic. Even outside of massive global events, there are many things that can prompt you to consider selling your business.

Of course, if you do need to sell your business for whatever reason, you want to make sure you maximize the sale value. After all, you worked so hard to build it up, and you want the maximum return on the time and money you’ve invested.

Take a blank paper and write down the answer to these questions:

• When and for how much do you want to sell your business?
• How will you know if you are getting a good deal?
• Will you be satisfied with your income from the sale?

This will help you understand your goals and set realistic expectations. From there, you can use the tips below to maximize sale value.

Improve your Company’s Performance

Selling your business involves planning. This gives you enough time to make the necessary improvements to your company, notably infrastructure and operational functions.

Put yourself in your buyer’s shoes. What do you see in your company that’s worth your asking price? Where do you see your business in the next five years? A buyer will consider a range of factors before finalizing the deal. After all, this is a long-term investment for anyone looking to buy your business.

So, what improvements does your business need? Your potential buyers will consider your business’ profitability, products, and market position. They will also check your conversion rates and the strength of your supply chain.

Evaluate Your Financial Statements

If you are putting your business for sale in Cardiff, the first thing you should do is hire a professional accountant to evaluate your financial records. They will help put your business in the best position to attract a high sale value while suggesting the best exit transaction.

You may not care about GAAP (generally accepted accounting principles), but your buyers do! Your accounts should be accurate, up-to-date, and present the current financial status of your business in clear and concise terms.

For example, if your accounts show long-overdue receivables or a slow-moving inventory, buyers will take this as a bad sign. This indicates customer dissatisfaction and poor planning and marketing. Remember that a buyer will look closely at your cash management practices, inventory, liabilities & assets, your performance so far, and the overall financial health of your business.

You will most likely need the help of a professional chartered accountant to oversee your financial accounts. Your accounts should not only be in line with GAAP, but they must be presented in a way that will make potential buyers rest easy knowing that your business has growth potential. This is an essential part of securing the best sale price for your business.

Create Competition

The next step in selling you business will be to reach out to potential buyers. It’s important to target potential buyers who are not only interested in buying your business, but are willing to pay the best price. This could be a business selling complementary products and services, or a foreign company looking to acquire something in your city. A potential buyer could also be your competitor. So, the first step is to figure out who your potential buyers are.

Create a list of companies that have shown interest in similar businesses. However, this doesn’t mean you should limit your offer to buyers from certain categories. Instead, approach as many investors as possible. By evaluating the profiles of potential buyers and putting yourself in front of as many people as possible, you can maximize your business’ sales value.

Select the Right Agent

The biggest mistake you can make when selling your business is not hiring an agent. You might save a few dollars on commission, but you are missing out on the opportunity to maximize your business’ sale value. An agent knows the ins and outs of this industry. They will gather information about local companies, top international investors, and complementary businesses that could be your potential buyers. If you present your business as a valuable investment, these firms will pay a lot more than your asking price.

You need a real estate agent to execute the transaction. An agent will help you shortlist the most deserving and high-paying buyers so you can focus your attention on people who will pay the best price for your business. They will also help you with the letter of intent, bidding process, property inspection, closing, and other aspects of the sale. The right agent will save you time involved in evaluating buyers’ profiles and do all the hard work for you.

Bottom Line

Plan early and make important improvements to make your business look as good as possible to potential buyers. Hire a certified chartered accountant and a professional agent to help you get the best price for your business.

*This is a collaborative post.