In your wildest dreams
It’s Saturday morning, and you are sitting in your kitchen with your spouse enjoying a leisurely breakfast, when all of a sudden there’s a knock at your front door. You both look at each other and wonder who could it be. The gardener is not due to come today. You know that your family didn’t plan on visiting you this morning, and most of your friends simply just don’t drop in unannounced. So you get up and go to the front door and open it. There’s a strange man standing on your porch, and he’s looking at you with a smile on his face. The conversation goes like this:
You: “Yes can I help you?”
Stranger: “HI, my name is Greg, Greg Jones. I just live down the street, and every day I drive by your business and I’m very impressed with it.”
You: “Well thank you for that compliment, but you didn’t really have to drive over to my house to tell me that.”
Greg: “Well, I won’t really waste your time, but I’d like to make an offer to you to buy your business.”
You: “But my business isn’t for sale.”
Greg: “That’s fine, but I’ve been looking for the last 18 months to buy a really good business and everything that I’ve seen, heard and researched about your business ticks all the right boxes for me.”
You: “Look, I appreciate you coming by but my business isn’t really for sale. We’re doing really well, we’ve had our best sales year this year and we’ve got plans to do a lot better in the coming years.”
Greg: “I know all that. I’ve had my accountant go over some of the public figures that are commonly available, and you certainly have been doing well. In fact, every day I drive by your business it seems that you have more delivery trucks in there than you did the week before, so things are definitely on the up and up for you.”
You: “Look, I appreciate your compliments but my business simply isn’t for sale.”
Greg: “I’m willing to offer you $10 million dollars for your business. Now I know that’s well above its current market value, but I see it as a valuable asset that would compliment my existing business.”
At this point your jaw hits the ground and your mind conjures up pictures of a boat you’d like to buy, a stroll on the beach with your spouse and perhaps an image of you sitting in a bath of cash. Wouldn’t it be nice? Wouldn’t it be nice if you were actually knocking back unsolicited offers from complete strangers who want to buy your business?
The reality of selling your business
However, this rarely happens for business owners. Usually they decide to sell their businesses when it’s too late — when sales are on the slide, when profits are drying up and when the owners themselves have lost interest in the business.
If you want to maximise the sale price of your business, then you need to work towards a plan. You need to give yourself enough time to get your business ready for sale. Yes, you heard that correctly. Most businesses are not ready to be sold, and some will take longer than others to get ready for sale. You need to make sure your business is always sale-ready. Here is a list of tips to get your business sale-ready in minimal time:
Modernise your brand
Is your business looking tired? Does your logo, brand and corporate appearance reflect a vibrant, growing and innovative business? Or does your business image look like it is stuck in the 1970s? No one is going to give you top dollar for your business if on first appearances it looks tired, drab, and going nowhere.
Get your numbers in order
Your business will look more appealing to a potential buyer who is willing to pay more if your financial systems and processes are up to date and generating valuable decision-making data. It’s a sure sign of laziness and apathy if your financial accounts are months behind, and worse still, you haven’t lodged your income tax returns for the business for the last three years. Get your financial systems and accounts up to date so your business looks proactive and ahead of the competition.
Update your product line
Is it time to drop some unprofitable product lines? Maybe you need to add some new, high-margin product and service offerings for your customers. Give your bottom line profit a boost by overhauling the products and services that you sell. It’s time to drop the non-performers and add some strong sales growth to your business with some new, market-leading products and services. A potential buyer of your business will not give you top dollar if you are still peddling low-margin, old product lines.
Automate and innovate
You will get a better sale price for your business the more it can run without so much of your involvment. If the business is too dependant upon you, then it will be less appealling to a new owner. Take a long hard look at your business systems and processes and see what you can automate and innovate. No one wants to work 80-100 hours in their own business, and a potential business owner is not going to buy your business if that is what is required by them. Streamline and create efficiencies across your entire business, and try to automatic as much as you can. A business is more attractive and will command a higher sale price if it can be run without the owner being tied to it.
Ditch the deadwood
Rejuvenate your staff by removing non-performers and employing experienced, skilled-up staff. This will not only help you automate and innovate your business, but it will also free up your time to make the business more appealing to a potential owner. You can command a higher price for your business if you have an experienced, top performing management team in place.
In summary, be ready
Have a plan in place to get your business sale-ready. It doesn’t happen overnight, and it requires careful thought and deliberate action by you as the business owner. I have seen too many disappointed owners sell their business for a fraction of what they could have because they didn’t take the time and effort to get their business ready for sale. First impressions are important. If your business is looking tired and run down, then now is the time to give it a complete makeover to appeal to potential purchasers.
Always be ready for that knock on the door. If you aren’t, then it will be a missed opportunity, and your dreams of a happy retirement will disappear.
If you’ve had a success story, let us know in the comments. It’s always great to dream big, and who knows, you might just be one of the lucky ones. But, as they say, good luck comes to those who work hard.