Everything you must do to prepare to sell your business is important, so it’s difficult to boil this article down to only 10 things. But following are 10 things most owners have not accomplished and that are critical to having a sell-able business and increasing the value of your business.
1) Start planning your business exit NOW. The number one reason businesses don’t sell is owners don’t realize the need to plan for the sale of their business. Before you can work on increasing the value of your business, you need to start the exit planning process so you understand all aspects and determine what’s necessary to even have a salable business.
2) Get the realistic value of your business. Your business value can be determined by calling a business broker / consultant and asking for a Broker Opinion of Value (BOV) of your business.
3) Develop a plan to begin overcoming the obstacles you face.
4) Replace tax minimization accounting policies with profitability maximization policies.
5) Increase your gross margin to increase your profitability, and thus the value of the business.
6) Increase your sales and marketing efforts. Many businesses have significant opportunities for improvement in this area.
7) Implement marketing automation. The opportunities for significant revenue growth through marketing automation are very real and the cost is inexpensive when weighed against the benefits (which are amazing!). Although there are numerous marketing automation service companies, consider reviewing the free resources (webinars, reports, videos and articles)
8) Systematize, perfect and document your business operations.
9) Steer away from a Flat organization and develop second-level management to minimize your importance to the success of the business.
A flat organization refers to an organization structure with few or no levels of management between management and staff level employees. The flat organization supervises employees less while promoting their increased involvement in the decision-making process. This means that employees can bypass middle management and communicate directly with higher management or the Owners. Though this may be touted by giants like Google, for the small business intent on scaling building value and then perhaps selling or getting acquired, it is BAD!
10) Write your buyer’s “general” business plan and 90 Day road map.
Im not a big fan of Business Plans but having something is better than nothing and it show good will towards a buyer if you invested that little time to help the succeed. At Max Business Profits, we use Road MAPs (Massive Action Plans) which can be corrected and revised on a dime if necessary, based on changing market conditions or internal planning.
CAUTION! Although these ten suggestions will set you on a great path to successfully selling your business, do not ignore the rest of our blogs containing much more information, suggestions and details to help you successfully and profitably sell your business. These are just the obvious! Well, obvious to me, at least!