Are you planning on listing your business for sale in the New Year? You may be ready to proceed immediately, offering it for sale “as is” and prepared to make price concessions to account for any of its unaddressed weaknesses. Or, you may have decided to delay listing it until you’ve made the necessary improvements to overcome its weaknesses and make it more attractive to prospective buyers.
In either case, you must first evaluate certain key aspects of your business and then assess each them. Through this process, you will be deciding whether your business is ready to present for sale, or improvements need to be made in order to attract prospective buyers.
The following pre-sale to-do list is a great way to start preparing your business for sale in an organized and efficient manner.
- Flag areas of your business in need of pre-sale improvement. Make a list of these areas and rate them as either good, average or poor. The primary aspects buyers will look for include: legal condition, business image, business operations and organization, products, clientele, and transferability. Buyers are attracted to businesses with low risks and high rewards, and these are the aspects of your business they will look for when considering it as a possible purchase. For a complete list of primary business aspects that buyers consider, download for free, The BizBuySell Guide to Selling Your Small Business.
- Commit to a pre-sale improvement action plan. After you’ve completed step one and identified areas of your business in need of improvement, it’s time to evaluate these areas and decide whether or not making changes is necessary to the sale of your business. Ask yourself “Yes” or “No” to the following questions: Is the weakness in an area of high importance to the success of my business? Is the weakness likely to lessen a buyer’s interest or affect the price a buyer is likely to offer? Is the cost of improving the condition likely to be less than the price concession the weakness is likely to force? Can I implement the necessary changes within the timeframe of my sale goal?
- Create your pre-sale improvement plan. After answering the above questions, you may have decided some areas of your business are worth improving, while others are not as high a priority. Once you’ve made a list of the areas to improve, it’s time to create a pre-sale action plan. This action plan will include: the necessary steps you’re committed to take; the timeline you’ll follow; the resources you’ll commit to the effort; and, how you’ll assign tasks in order to complete improvements by the time you are ready to launch the marketing of your business.
- Keep your sale plans quiet while you prepare your business. Maintaining a level of confidentiality is extremely important in the business sales process. If word of the sale leaks out to customers, suppliers, creditors, employees or competitors, this could instigate a negative reaction, interfering with your business’s operations and affecting its value. It’s best only to share your business sale intentions with key staff members and outside consultants, and only when accompanied by a non-disclosure agreement or confidentiality agreement. This is also true when working with financial or legal advisors. Whoever you need to share this with, always stress the importance of keeping your business sale private.
- Add value to your business now. As you prepare your business for sale, you’ll most likely find areas in need of improvement. Improving these area can make your business more valuable for prospective buyers. Read our article, 3 Steps to Take Now to Sell Your Business for Top Dollar Later and learn valuable tips on how you can improve the value of your business as you prepare it for sale.
Whether you choose to sell your business “as is” or make the necessary improvements to improve its value and attract more prospective buyers, this to-do list is a great way to assess the condition of your business and create an action plan going forward. For more helpful information on preparing your business for sale, download for free, The BizBuySell Guide to Selling Your Small Business.