Prepare business for sale

Don’t be alone when running your business or improving it ready for sale.

Using my 25 years experience and knowledge of countless businesses in all industries, I know how to properly appraise your business and design strategies to increase its value.

Let’s start, with no obligation, and see what we can achieve.

You know the saying: When you work in your business, you don’t work on it. That is true. From time to time, you need another “set of eyes” to objectively and expertly ask where you are now, and where you are going. Remember, the best way to run a business today is as if you had to sell it tomorrow.

Prepare business for sale and avoid mistakes

Prepare Business for Sale - Common Mistakes to Avoid

Prepare business for sale and avoid costly mistakes

Do you know how to prepare your business for sale? Can you think of all obstacles and risks that are waiting for you? Unless you have already journeyed this path, you will make costly mistakes. I will help you avoid them.

Here it is in a nutshell.

  • Not planning ahead
  • Insufficient preparation (everything one has to do is here)
  • Setting a sale price that is too low, too high or do it to soon
  • Not having proper and accurate documentation
  • Rushing to the end
  • Negotiating with only one buyer
  • Misrepresenting facts and data (inadvertently or with a purpose)
  • Changing your mind on the topic of price, conditions, time, etc.
  • Investing time and money in weak marketing material
  • Signing harmful sale documents
  • Not taking care of confidentiality
  • Neglecting your business during the sale process
  • Failing to defend your business’ value
  • Waiting to long to sell.

There is more. Too many times I have witnessed business owners making avoidable mistakes and it cost them hugely. Not just money, but much more. Nerves, sleep, family, friends, dreams, goals, inner values… Don’t go alone into the process of selling your business!

If you want to learn more, read the article “Top 10 Mistakes When Selling a Business“. There are also several useful links you can follow and dive deeper.

Prepare business for sale and avoid mistakes

How to Prepare Business for Sale in 8 Steps

1. Summarize all your costs and find areas for reduction

Steps to prepare business for sale 1

Not an easy task, especially for a business owner who doesn’t have extra time and energy. Without reducing work force, salaries and materials necessary for maintaining established quality, expertise is needed to achieve this goal. You can either learn by yourself, or you can work with a consultant who has the knowledge and tools to help you make your business more profitable.

2. Review and get all papers in order - both legal and accounting

Steps to prepare business for sale 2

To evaluate your business, the first thing that anybody will ask is to see your documentation. You should know where to look for specific data, how to classify them and represent them as marketing material for potential buyer. Again, you can do it yourself or hire a professional. Be aware that there are certain established ways and rules you should follow. 

3. Standardize all the work in your business

Steps to prepare business for sale 3

Every employee must be replaceable if you want to have a stable business. Also, to be able to measure work efficiency, there should be a standard to compare to. When you need to hire additional workers, it is much easier to quickly introduce them to their tasks if your business has standardized procedures and targets. Whether you have decided to sell your business or not, the sooner you introduce standardization to your business, the better.

4. Document procedures and how work is done

Steps to prepare business for sale 4

You should have detailed description of all the work, no matter if it’s done daily, weekly or just once a year. Statement of Practice Manuals specify how somebody should work, the order of operations, tools they need, what their targets and goals are. Yes, that is tedious job, but without it, quality and effectiveness  can’t be measured, there are no tangible indicators for bonuses and a potential buyer will not be satisfied.

5. Make feasible operational and strategic plans

Steps to prepare business for sale 5

Among thousands of small businesses I have dealt with, just a few had written any plans. Operational and strategic plans help you achieve your goals, measure success and balance resources. If you intend to sell your business, already having these in place can be very helpful. There are many books and instructions how to make good plans. All of them agree on one thing: one person can’t do it alone. The same is true concerning sales plan. Potential buyers expect you to have them and their decision and price will strongly depend on them.

6. Prepare and educate your employees

Steps to prepare business for sale 6

How much should you tell your employees, when and how to do so – those are some of the most frequent questions my clients ask me when we start the sale process.

In my experience, small business owners care very much about their employees and often include them in sale negotiations. This is the area where you really need assistance, since it is doubtful you can be impartial.

7. Determine desired price for your business

Steps to prepare business for sale 7

There can be a great difference between what you want to get for your business, and what is the realistic price. When doing the Business Appraisal for you, and later, when we plan the sale process, we will come to a price that will be both satisfactory for you, and realistic for current market and economy trends.

Selling a business is much more complex then selling a house, a car or anything else. You are selling the present, but the buyer is buying the future.

8. Evaluate your company as you were a buyer

Steps to prepare business for sale 8

Walking in a potential buyers’ shoes is a great way to decide what price you would put on your business, but are you able to do this alone. If you are like most owners, you have probably been exposed only to your business and way of doing things.

Determining the fair market value of your business is both science and art. The science is not too difficult, you can learn that. But the art of assessing value can’t be thought. It comes from experience and years of engaging in numerous sale negotiations, understanding the market and purchasers risk appetite.

If you don’t know the science and the art of appraising businesses, this part of preparation you shouldn’t do by yourself!

Prepare business for sale and avoid mistakes

Don’t be alone when you decide to prepare your business for sale. Don’t make costly mistakes. Avoid stressful situations. Let’s have a chat.

To learn more about everything you should consider before engaging in the sale process, maybe this article from Inc.com will help:

What You Need to Know Before Selling Your Business?”

Prepare business for sale and avoid mistakes