Selling your business will be one of the largest financial and emotional decisions you ever make.
The process could take six months to a year once your business has been listed for sale.
But before you even get to that point, you will have to put a lot of time and energy into getting your company ready.
Even if you don’t plan on selling your business for years to come, you can take these steps today to improve your profitability tomorrow.
1. Build Your Profit Margin
If your business is just breaking even, you can’t expect to make much off of the sale. In order to secure a good price, you need to create a better profit margin.
There are three ways to do that.
The first is don’t take too much money out of your business. The earnings your business retains will indicate to potential buyers that it’s healthy.
The second way to improve your profit margin is easier said than done. You have to find ways to increase sales and therefore increase your profits.
You may consider revamping your marketing plan and creating new lines of products and services for your market.
Your final option is lowering your expenses. Look for places where you can spend less without sacrificing quality or sales.
2. Don’t Take Your Foot Off the Gas
Some business owners feel like selling their business takes the responsibility for its success out of their hands.
But if you want to make a profit on the sale of your business, you need to continue to invest and improve. Make sure you keep up with changes in technology and equipment for your field.
3. Make a Five Year Plan
Not only do buyers want to see an evolving company with good profit margins, but they also want to be able to replicate that success in the future.
If you try to sell your business without writing a five-year plan for its continuation, you create a disadvantage for the buyer.
Although they may not follow your plan, they will feel a lot more confident purchasing your business if they know that you see a future for it yourself. They can adapt your plan to meet their own goals and achieve their vision.
4. Develop Your Processes and Empower Your Employees
If you don’t want your business to fall apart without you there, your processes all need to be teachable and repeatable. Buyers need to be able to train new employees to do essential functions and keep the business running well.
By creating repeatable processes, your employees will feel empowered. You will be able to recognize the people who can’t keep up easily and work to make them a stronger part of the team.
You may think that if you run a small company, there is no need to create training for your employees. After all, they can be trained on the job.
But you are leaving your business at a disadvantage. If someone quits without much notice, you lose all of their knowledge of the processes and how to make them work efficiently.
5. Break Away from the Competition
If your business doesn’t have a competitive advantage, it will be difficult for you to find a buyer. You need to stand out from the crowd.
Even if your product or service isn’t unique, you can still market the way you complete processes and your brand values.
Get testimonials from your loyal customers and ask them to share what keeps them coming back.
6. Get Advice Early on in the Process
Don’t wait until you are ready to put your business on the market to begin thinking about the sale.
Reach out to a business broker to learn how you can best prepare your business. With the right professional advice, you will be able to ensure a better price. At Dolan Sales, we have been selling businesses for many years and we would love to help guide you through the process. We know exactly what it takes to bring a buyer from interested to the point of sale. Contact us today