When it comes time to sell your business, it’s essential to have all your affairs in order if you want to attract buyers. If you’ve had trouble getting any traction with prospective buyers, you need to take a look at your business. Pretend you’re the one who’s going to buy it—what are the pitfalls? Asking yourself questions about the financial state of the company will help you figure out where your business needs some work.
Current and Future Profits
One of the first things a buyer will look into is the financial standing of your business and how well it’s doing. They’ll want to be certain that there’s future earnings to be had, and you can assure them by showing them your past profits and how you’ve grown over the years. Essentially, you’ll need to prove to them that increasing profits won’t be an uphill climb.
Who Can Run It
For small companies, the business owner is used to working in the business, and often times its ability to function relies solely on the owner. Buyers won’t like this, as they may have issues operating the business since the owner is the only one who knows how it all works. It’s best to start training a manager or someone who will be working on the transition and training in new leadership. This shows them that the transition will be smooth, and the business can still operate without the owner.
Customer Relationships
If the only reason your customer base keeps returning is because of their personal relationship with you, buyers won’t be interested in taking over. You need to show that your customers will stay with the business under new ownership—if not, buyers can’t be assured that there will be more profits in the future. It’s smart to ask customers to leave reviews on Google to show that they’re satisfied with your products or services.
Implement Processes
One way to show that you have a well-run business is to have documented procedures. You should have clear, written job descriptions for each employee, along with process documents for frequently done tasks. This shows buyers that the business can function fine without you, and it also shows that the employees have a solid understanding of how things work in the company.
Our Fractional COOs can help you improve your admin & operations, financial, leadership, sales, and technology departments to make your business appealing to potential buyers. We specialize in exit planning and assisting business owners in preparing to sell.