1. Timing. Do not wait until your business is on the decline to sell. You are more likely to attract buyers when your business is growing. If the business is growing profitably, maybe it’s time to sell. This enables you to maximize the price for your business and will likely reduce the time your business is on the market.
2. Don’t accept the first cheque through the door. Viable businesses with strong financial history will usually be of interest to more than one buyer. If the market is strong, interest rates are quite often low and there is an abundance of capital available, making it easier for buyers to access financing.
3. Buyers need information. You need to be fully accountable and transparent by providing detailed financial documentation and a proven revenue stream. A potential buyer wants to see if there is opportunity for growth.
4. Prepare your business to sell. There are many non-business reasons for selling a business. These can include retirement of an owner or key manager, health problems, divorce, a desire to try something new, a lack of heirs, or even a death of an owner. It is therefore very important that financial information for the last three to five years reflect the true state of the business.
5. Be open minded. An M&A advisor can create increased of value for you by helping to analyze how to make your business more valuable at the time of sale. Don’t forget to start planning early – at least two years before you plan to exit your business! An M&A advisor can provide the experience and knowledge to ensure the best possible outcome for you and your business.
Bob Brown, Senior Advisor