Grooming Your Business for Sale: Everything You Need To Know About It

Are you planning of selling your business? It’s important to prepare for the sale in order to improve pricing and reduce the time it takes to complete a transaction. You should note that the grooming process takes time.

For you to know that you have completed the grooming process you should feel confident that you can attract qualified buyers quickly and get a good price.

What you need to do

For you to properly groom your business you need to do a number of things:

Know your business worth: do you know how much your business is worth? You need to. The most effective way of doing this is consulting a professional and asking him/her to value your business.

You can also contact people who have recently sold similar businesses as yours and enquire on how much they sold their businesses at. Having an idea of how much your business is worth gives you an idea of the amount that you should expect to get. It also allows you to budget for the money that you will get from the sale.

Undertake a financial review: you need to review the prices that you sell your products or services at and make necessary improvements. Of major importance you should identify some of the products that you can sell at higher prices thus rake in more profits and, hence increase the perceived value of your business.

Draft a business plan: It’s wise to have a plan of what you expect your future to be like. This calls for you to have an annual business plan. For example, you can have a 3-year projection plan. You should also prepare a SWOT (Strengths, weaknesses, opportunities, and threats) analysis in order to let the buyer know about your strengths and weaknesses.

Evaluate management succession: you should evaluate your management team to find out if it has the ability and skills to step into your shoes when you leave. If the team doesn’t have the skills, you should work towards impacting the skills.

For the key members of the management, you should formalize your relationship by signing employment contracts.

Conclusion

These are some of the things that you can do in order to groom your business for sale. To avoid damaging your goodwill and loyalty you should maintain the highest level of confidentiality when selling your business. This calls for you to ensure that the information about the sale doesn’t leak to your customers and staff. You should also ensure that the parties don’t hear the news second hand.

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