Benefits of preparing your business for sale 🛒
It’s astounding how many seasoned business owners believe that their numbers, or perhaps their public image, are enough to convince buyers to spend thousands, hundreds of thousands, or even millions of dollars on their business.
There’s more to it than pointing to your website and sales numbers, and saying, “Pretty good, huh?”
👉 You must prepare. Otherwise, you miss out on benefits like:
- Establishing a realistic valuation of your business.
- Increasing the chances of finding suitable buyers with the money, know-how, and passion to run your business.
- Actually continuing to run your business while the sale happens.
- Being able to reach for detailed documentation to provide answers to the trickiest of questions from potential buyers.
- Unveiling the story and history behind your business, including its failures and problems. A compelling story often helps to increase your brand value.
How to sell your business online 🪜
We have a seven-step process to cover all bases when readying your business for sale. This way, you’re able to answer questions from potential buyers. You also have all the documentation ready to make it clear why your business is worth what you think.
👇 Follow the steps below on how to sell your business online:
Step 1: Conduct a business assessment
Continuously heralded as a method for improving your business regularly, business assessments are also essential before you sell the entire business.
A proper business assessment does three things:
- Highlights key performance indicators
- Diagnoses dysfunctions and gaps
- Discovers areas of opportunity for the future
Keep in mind that a financial assessment is only one aspect of a business assessment. It’s not all about showing that your business had $10M in revenue last year, but analyzing all key performance indicators. There are multiple ways to break it down, but the SWOTT assessment is the most well-known:
Filling in these blanks ensures you’re not tongue-tied when a potential buyer inevitably asks about threats and failures, when you’ve mainly focused on what’s so great about your company.
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Step 2: Value the company and project future earnings
Valuing your company is obviously important; you have to put a price tag on it. But, we find that many business owners find it too intimidating. There is also an opposite situation, when everything’s perfect, so they overvalue, scaring potential buyers.
From book value to discounted cash flows, and market capitalization to EBITDA (earnings before interest and taxes), there are plenty of methods for putting a value on a business.
👉 Here are the most straightforward
This article was written by Joe Warnimont and originally published on CodeinWP.