There is no better strategy than to prepare early and thoroughly! Put yourself in the shoes of prospective purchasers and critically evaluate how you can present your business in the best possible light. If your evaluation highlights areas of weakness, then that is great. You can now take action to turn that negative into a positive and add more value to your sale. The end goal is a sale at the best possible price so dedicate some time each week to exiting your business successfully.
The point to remember here is first impressions do count!
Highlight the positives and downplay the negatives
A systematic approach
Do you have documented policies and procedures? If not, now is the time to start working towards improving your business. Purchasers want to buy a business that is well run, with secure, well trained staff, that minimises risk to them and their investment and sets you up to sell.
Prepare that paperwork
Having your financial and business records ready and available from the beginning is critical.
Financial records are required for the appraisal process and will be required by prospective purchasers. Having your profit & loss statement prepared by an accountant and ideally, one that is an industry specialist, is gold. The more easily understood your profit and loss statement is, the less issues are likely to arise with a prospective purchaser. We strongly recommend that you have at least 3 years of profit and loss statements prepared in readiness for selling.
Ensure other business and licencing documents are ready. This may include commercial or supplier contracts, licences, permits and registrations. You may wish to have your accountant or solicitor review them to ensure that they are current. There is no point in getting down the path to selling, to be stopped at the final hurdle hunting around for expected documents or finding they are out of date.
How good is your lease?
If you are a leasehold business, how long do you have remaining on your lease?
Accommodation leaseholds of over 25 years are ideal to retain the value of your business. If your lease term is less than 20 years, it is worth considering how you can add more years. It may be that some capital works could be done such as upgrading bathrooms, the cost of which could be negotiated with your landlord as extra time on your lease. Such improvements also improve your presentation for sale or, if this is not an option, you may be able to purchase extra years from your landlord.
If you have a retail business lease, check how long is left on the current term and what options are remaining. Will the purchaser have sufficient security of tenure?
Build a strong support team
Don't be afraid to build a strong support team to help you successfully develop your exit strategy. An account, solicitor and reputable broker are all there to help. You will be amazed at the value industry trained specialists can provide.
We have a detailed checklist that we can email to help set you up for sale, at the best possible price. Simply send us an email at [email protected] and our team will be more than happy to assist.