If you’ve built your business up to a stage that you feel it is worth selling, it’s undeniable that you’re no stranger to hard work. This is good news, because the process of preparing a business before you can sell it will be a comparative walk in the park if you follow these 3 steps below. ActionCOACH recommends a sale preparation period of up to 12 months, so even if your heart is set on selling right now, be prepared to take some time getting it right so you can sell your business for its greatest possible value.
Step 1. Gather your business information
ActionCOACH has published a series of blogs on developing systems and procedures for all parts your business. If you already have these procedures in place – great news – you already have much of the material needed to help value your business to sell it. If you need help preparing your business information, ActionCOACH is highly experienced in preparing businesses for sale and valuing businesses. Call us right now to get started, on 02 9146 4439.
The business information you provide must be accurate, because a savvy buyer will always ask to go through them thoroughly.
Business information includes:
- Financial statements for the last 5 years
- Details of physical assets
- Details of other assets
- Legal documents
- Registration papers
- Business profile, procedures and plans
- Market and competitor comparisons
- Sales reports and forecasts
- Business history
- Business procedures
- Business and marketing plans
- Staff, supplier and customer information
- Employee details
- Supplier details
- Customer details
Step 2. Seek professional advice
Professional business advisors like ActionCOACH are experienced in valuing and selling businesses, and they will ensure the process runs smoothly and that the end result is achieving the top price for the business that you’ve worked so hard to build. Another advantage of using a professional is that they have other clients who could be interested in buying your business, which could save you time and money in advertising. Email ActionCOACH by clicking here.
Step 3. Choose one or more valuation methods
There are a range of methods that assist in valuing a business, and a combination of methods can be used. ActionCOACH can help you determine which methods suit your particular business.
- Look at the current marketplace value of others within your industry and how they are valued (ActionCOACH has access to market data)
- Calculate the value of your current and non-current assets, including goodwill assets such as procedures, customer relations, company reputation and brand recognition. Depreciation must be factored in to physical asset value. Calculating goodwill assets is complex, and will require an experienced professional such as ActionCOACH.
- Work out the cost of creating your business from scratch, for example buying stock, training and employing staff, buying or leasing premises, setting up an online presence and obtaining licenses and tools.
- Be sure to consider what the business could be worth to a particular buyer; that is, include any synergy value they might extract after the purchase.
Make sure you have the right steps in place to accurately value and sell your business. Download your free copy of the eBook selling your Business here or come along to one of our 6 Steps to Building a Better Business Seminars here.