Getting a business ready to sell can be a big undertaking, but it’s better to proactively prepare as opposed to winging it or scrambling. Knowing what to expect ahead of time and being proactive in your preparations can pave the way for a faster sale.
Even if you’re not going to be selling your business right away, if you take certain steps to prepare for a possible sale, then you’ll be ready if and when the time does come.
If you don’t prepare, it can take you months and months of prep time, and the time it takes to make a deal can be significantly longer. If you’re ready and you take the necessary steps you may be able to sell it in a few weeks. Some people even advise that you always operate your business as if you’re going to be selling it, even if you aren’t sure.
The following are some specifics to keep in mind if you are getting your business ready to sell.
Use a Virtual Data Room
When you’re selling a business, regardless of the phase it’s in, you’re going to need to ready yourself for potential buyers and due diligence. First and foremost for due diligence, set up a virtual data room that allows for secure document management and file sharing.
A virtual data room is one of the most important tools you can have if you’re preparing to sell your business or even do something like raising capital and securing investors. A virtual data room allows you to work with external parties and you don’t have to worry about secure information falling into the wrong hands. It’s a simple, time-saving way to manage the logistics of due diligence.
Without a virtual data room, you’re putting yourself and your business at serious risk and the potential deal as well. If you rely on a simple consumer file-sharing site, it’s going to be problematic regarding security and exposure. If a deal doesn’t go through, the security risks are heightened even more.
Know What Buyers Are Looking for
Prepare yourself in terms of knowing buyers are most likely going to be looking for. Of course, profitability is important, but there’s more to it than that. For example, if your business is currently profitable, is that sustainable? Is there room for growth?
How is your business different from others and what sets you apart and gives you a competitive edge? Is there anything? What if your competitive advantage lies in particular employees? How will that be handled?
Speaking of particular employees, what will your business look like you without that there? What is the management structure and how will that keep going once you’re gone?
Is your business scalable? What about the company culture?
All of these are less obvious factors that are likely going to be important to buyers.
What are the Logistical Considerations and Possible Hurdles?
Things like company culture and competitive advantage are broad and more conceptual, but there are also the logistical considerations you’ll have to keep in mind as you prepare to sell a business.
For example, what are your workers classified as? Are most of them actual employees or do they work as independent contractors? What are your current lease stipulations, and how do you manage your long-term existing vendor contracts?
Do You Know How Much Your Business Is Worth?
You may think you know the value of your business, but is that based on emotion or the facts? It’s a good idea to get an appraisal early on so that you aren’t surprised in either direction when it’s time to sell.
Most buyers are going to want an appraisal anyway, or they’ll do one themselves. Create more credibility and speed up the process by doing it on your own.
An appraisal might also show you that it’s not the right time to sell and you may have some work to do to get your business to that point.
Finally, put some time into building up your brand or ensuring it’s how you want it to look to potential buyers. Anyone considering buying your business seriously is going to research you. They’re probably going to Google your business before they do anything else, and yet this is an area a lot of people tend to overlook.
You want your site to look polished and professional, and you want your branding to be on-message across all platforms. You also want to make sure your social accounts look strong and well-maintained.