Getting Your Business Ready To Sell!

Getting Your Business Ready To Sell!

Would you buy a house without doing the necessary due diligence first? Would you put pen to paper before making sure you were moving to a reputable neighbourhood, that the wiring in the house wasn’t faulty and that the entire place wasn’t about to collapse in the next five years? No? Neither would we and or any smart buyer of a your business!

Just like with any high value purchase, parties interested in buying your business are going to do the necessary digging to ensure they are 100% confident and comfortable with the purchase before handing over their hard earned cash!

In order to make this decision as quick and painless for potential buyers, it is vitally important that you, as CEO, make the information needed to enhance the value of your company and get the deal secured easily accessible and reliable as possible.

Adopting Habit of Profitability# 1, Developing One High Growth Performance Driver Per month, is essential to making sure you are ready for any scrutiny from potential buyers & investors! By focusing on working on the business rather than working in it, you can focus on the key drivers of the business which are essential to its running, success and growth!

By picking one high growth driver per month, you can ensure you avoid falling into traps such as over reliance on a single customer or supplier (which can severely impact the value of your business) or ensuring you have the right technology in place and minimize risks such as not having the right people in the right places on your management team.

Potential buyers will, understandably, pay the closest attention to your company’s financial information. Buyers will want to see how health your company’s cash flow is, is there opportunities to drive more revenue and if there are any potential red flags they need to watch out for.

It is imperative for CEOs to work closely with the CFO and/or accounting team to ensure the accounting information is in order and that the processes are documented and scalable. By ensuring this vital information is as accurate and up to date as possible, you’ll also be able to adopt Habits of Profitability™ number 5, Beat Peer Benchmarks and Get an Annual Valuation. By getting an annual valuation of your company, you’ll know what a fair price for your business is and ensure you get the best deal possible.

Habits of Profitability™ # 2, Have & Use Financial Statements, will also help you pass the due diligence test buyers will put you through before completing a deal. It will also demonstrate how dedicated and effective you are as CEO as using the financial statements will allow you to test “What If” scenarios and allow you to prepare to seize any opportunities and address any risks that may appear.

This article from BizJournals.com does a great job of outlining other ways of ensuring you have your company set up as strongly as possible to help the sale go through. Combining this insight with the Habits of Profitability

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