Putting your business on the market can be intimidating. It may feel like there are endless loose ends to tie up, and limited time to do it. Before you even begin the process of selling your business, though, there are some things which can make the process much smoother. If you’re thinking of divesting, keep the following in mind.

5 Tips for Selling Your Business

1. Start Early.

A business has a lot of moving parts, which makes transferring them even more work. Making a long-term plan for a business several years out is one thing, but when you’re selling, your timeline grows dramatically shorter. Consider what changes would make your business more attractive in a buyer’s eyes—and whether you are able to implement those changes on a shorter turnaround time.

2. Organize Your Documentation.

From HR records to liens, patents to registration, there’s no doubt that your business has a lot of paperwork attached to it. Not only will having all vital paperwork easily accessible and organized make the handover easier, but it will allow for you to work on your divestment strategy without interrupting your flow.

Having a balance sheet that is extensive and up to date can go a long way to getting your divestment in order; make sure that you have a full track of your fixed assets, debt exposure, pending litigation, and so forth.

In addition, having your licenses current, your IT security compliant, and your HR team looped in will take care of some of the most vital parts involved in transferring.

3. Find Your Niche.

Five Smart Tips to Consider Before Selling Your Business - NextLevel Business Consulting

Selling your business is a huge undertaking. NextLevel can help you divest successfully and profitably.

What is it about your business or investment that makes it attractive to a potential buyer? What makes it unique within the market? How about your strengths? And, just as importantly—what are your weaknesses? While focusing on where your business isn’t doing so well may not sound encouraging, it can actually set you up to put you into a better position.

If you know what your business’s shortcomings are, not only can you put effort into improving the most critical faults, but you can also understand which positives can balance out your negatives. No business is perfect, but you can ensure your business fits into a slot all of its own, which will ultimately make it attractive to the ideal partner.

4. Know Your Buyers.

Understand who you’re partnering with and who may be the most interested in your business, and make sure that your offer is attractive to them. One step toward this is to form relationships with investment bankers and brokers; a good connection with people who know the market will, in turn, let you plan better and set your assets up to appeal the most to said market.

Consider what potential buyers are looking for: are they financial buyers who value scalable infrastructures? Are they strategic buyers who are looking for interplay between markets? Use your knowledge of the market’s players to put you in a stronger position.

5. Be Transparent.

No matter what, there is always room for improvement—even if you’re in the middle of putting your business on the market.  Don’t expect to have everything squared away by the time you sell, but make sure that your buyer is aware of anything that they’ll be in for.  If you have any outstanding issues or works in progress, make sure that your prospective buyer is fully aware of them so that they can not only assess their own resources, but can prepare for the handover. Figure these out sooner rather than later to make it easier to lay out when the time comes.

In a previous case, a financial services firm company that intended to sell took the time to assess its position and assets. The company determined that if they strengthened their financial performance by investing in critical processes such as cash management and reporting, they would be able to improve their performance. After the adjustments, the company was able to deliver a 10-percent EBITDA margin, all ultimately resulting in a management buyout and an employee ownership structure.

Are You Considering Selling Your Business?

Selling your business is a monumental decision. Keep these tips top of mind to make the selling process easier and more successful. Contact NextLevel today to see how we can help you divest successfully.