Life as an entrepreneur is immensely challenging, but selling your company may be the biggest challenge you undertake. The process is full of emotions and highly complex. This can distract you from your primary goal, which is of course, selling your business for the highest possible price. Don’t try to make last minute cosmetic changes. Building value takes time, so you should start as early as you can. These seven strategies are the key to a higher price.
Get Expert Guidance
Now is not the time for DIY or learning on the fly. You need an experienced independent advisor who can assess salability, perform an evaluation, and help you prepare your company to go on the market. This is a huge moment in your professional life. Get it right by consulting a professional.
Buyers do not want to undertake a significant risk. So don’t expect high offers—or sometimes even any offers at all—if your business growth has stagnated or you’re merely breaking event. Don’t take a lot of money out of the business, either. High retained earnings shows that your company is healthy and profitable. So find ways to boost profits, even if it means changing the way you do accounting or taking a hit at tax time.
Lower Expenses and Increase Revenues
Take a hard look at your operations and processes so you can increase efficiency, better control inventory, and cut costs without reducing quality. You should also take a second look at your marketing plan to asses for new ways to boost sales, including developing new products or penetrating new markets. The goal here is a diverse customer base that offers recurring revenues.
Invest in Improvements
Many owners lose focus as they plan an exit. They stop planning for the future and lose focus on driving revenues and improving the bottom line. Don’t stop investing in maintenance, new equipment, and an excellent team just because you’re leaving. Doing so is a recipe for declining values.
Develop and Implement a Strategic Plan
Every business needs a formalized plan with specific, measurable goals for the future. This lends credibility you to your business, and clearly demonstrates your long-term growth potential.
Implement the Right Processes and Empower Your People
You must implement repeatable, teachable processes to ensure your business can function at optimum performance even in your absence. Empower your team to make good decisions so that they can ease the transition and support the new leader when they take the helm.
Find a Way to Stand Out
What sets your business apart? Find a way to sell your company and your brand. If you’re just one more business creating the same product as everyone else, a buyer has no reason to invest in your company as compared to any other company. But when you offer something no one else can—a beloved brand, quality intellectual property, a service no one else can deliver, or a team with unrivaled expertise—you deliver to the buyer a sound investment.