Are you ready to sell your business? With the stimulus plan for small business in place, funding for new businesses should be a bit easier. And there are plenty of brand new small business owners out there looking for a great business to buy.
To get the most from your business, it has to be in great shape. I recently read Sell Your Business for the Max by Steve Kaplan. It’s a great read if you’re planning on selling your business (and every small business owner should have the mindset of selling their business from the first day it opens whether you choose to sell or not). Kaplan’s book contains a step-by-step road map and helpful worksheets that walk you through all the requirements of preparing your business for sale.
Here are some tips right from the book:
- Keep your customers. Even if your customers are buying less, they should still be buying some. Your ability to show customer retention will go far in completing an acquisition. Remind the buyer that when the market comes back, business recovery is quicker if your customers are still in place.
- Position yourself for growth. Detail how you are positioning your business for growth. Perhaps the economy afforded you the opportunity to get a piece of equipment for a 50% discount. Sure, this hit your cash flow, but the upside is great: You are better positioned for growth. Another example: Maybe you were forced to lay off some employees, but you then restructured or streamlined your business process flow (the way you do things) to be more efficient. You are now positioned for greater profitability in the future, because you now have a company that’s doing more with fewer people.
- Turn operational tasks into profit centers. Look at each step in your operational flow to determine if any step can be turned into a profit center. This will demonstrate the true potential of your business by allowing you to grow horizontally. This is every buyer’s dream.
- Be visual. Prepare simple but visually appealing charts, graphs, and diagrams that will communicate all the positive attributes of your business in simple terms. For example, prepare bar graphs showing year over year increases in customers, profit, locations, or database size to help the buyer quickly digest the good assets. ? Brand, brand, and brand. Write down all your processes, products, and services—which are most likely proprietary as they have evolved over the years—and come up with a name or acronym for each. Naming or branding these allows you to better communicate their value.
- Present a solid business model. A business model demonstrates specifically how—and in how many ways—your business makes money and maximizes profits.
You can pick up a copy of Kaplan’s book to make your business more efficient — and if you decide to sell, you’ll be ready to go.