How Well You Run Your Business

2misi.com

Whether you're planning to sell your business in the near future or many years down the road, one of the most important rules to remember is the better care you have taken of the business, the more easily you'll be able to sell it.

This rule might seem like a no brainer, but it's very common for owners to focus so much on certain areas of the business that they neglect others, ultimately complicating the selling process when it comes time to leave the business. When someone is looking to purchase a business, they want to know that it has been properly run by its previous owner and will allow them the greatest chance for success.

There are a few key considerations business owners should keep top of mind at all times in order to help ensure the process will go as smoothly as possible when it's necessary to leave. Whether an owner plans to sell the business in one year or doesn't plan to sell it for a long time, addressing the following questions and actively making improvements where needed can pay off in spades when the time comes to put the business on the market.

Are Your Financials in Order?

 

Poor internal bookkeeping has been the downfall of many potential business sales. There is perhaps no bigger deal killer than when a potential buyer realizes that the owner has been disorganized keeping up the books and has no concrete way to prove the business's profitability. It's crucial to remember that if you can't accurately measure the financial strengths of your business, there's no way for a buyer to value it.

If you've neglected keeping proper track of financials, you can't start soon enough - even if you don't plan to sell your business for many years. It might seem like too big of a money or time investment to obtain the proper financial staff and systems to keep the books in order, but it's absolutely essential to your future and the future of your business.

Have You Laid Out Future Goals in a Business Plan?

Believe it or not, many businesses operate for years without a clear business plan, which makes it very difficult to sell when the time comes. Simply doing more of what you have been doing all along might have worked for you during your time as the business's owner, but that "strategy" will be of little help to a buyer who would take over the business with little knowledge of what you've done in the past. This is why it's important to develop a clear strategic plan that outlines the future goals of the business before you enter into the selling process.

This plan should include financial projections that prove to the buyer you are confident about the business's potential for growth and aren't attempting to hide anything. It's also important to communicate this plan throughout your business so that your employees can help transform these goals into reality and have a solid direction to follow after you're gone.

Have You Kept Your Business Up to Date?

In a business for sale transaction, physical appearance and condition can mean the world.
Oftentimes, owners are so busy and focused on other areas of their business that they neglect making important upgrades. They might not notice any detrimental effects from this while they're in charge, but once they try to sell the and realize that most buyers aren't eager to take over a business that is out of date, they'll regret not making these improvements along the way. For this reason, it's imperative to make any necessary upgrades or physical improvements to your business before putting it on the market.

Is Your Business Enabled to Run Without You?

It's important for a business owner to be actively in charge and to be invested in its success, but if you've run your business in a way that means it can't survive without you, problems are bound to arise when it's time to sell.

Buyers are typically wary of purchasing businesses in which the owners are indispensable and will have to maintain long term attachment. Owners who are committed to staying with the business can easily change their minds after the sale, leaving their buyers in a precarious situation.

To avoid this problem, make sure to hire and train qualified managers who are equipped to run the business even when you're not around. If necessary, seek the guidance of other business owners who have succeeded in making their businesses self sufficient and are willing to offer advice. This can be challenging, but you'll thank yourself for having done it when the time comes to sell.

Is Your Business Attractive to Business Supervisor?

Most business owners choose to work with a business supervisor when selling, as supervisors can often increase the chances of a successful sale as well as the net proceeds to the seller. To reap the benefits of these services, though, your business must be properly prepared.

The world of business supervisors is comparable to any other service profession in that there are a few select companies whose calls are always answered by potential business buyers because they can pick and choose among the best companies to sell. These business supervisors can be selective, so unless you have an attractive business without major "impairments" (which essentially means your business will be flagged as a risky investment), you might have a tough time attracting reputable assistance when you're ready to sell.

Selling your business might be a once in a lifetime experience for you, but supervisors do it for a living and are able to assess your business and determine whether or not they can find qualified buyers. The best business supervisors probably won't want to waste their time on businesses they know will be a headache to sell, so businesses that are in solid financial and operational shape will have the greatest success.

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