One of the most important things you can do when approaching the prospect of deciding to list your company for sale is to undergo a preliminary business valuation. Even speaking with a knowledgeable website broker can help to clarify whether or not your company is truly ready to be listed for sale.
Now might not be the right time, but speaking with a website broker and undergoing an early business valuation can help you to identify some of the key areas that you might be able to evaluate in preparing your company to be sold in the future. The specifics of your business will dictate whether or not it’s the appropriate time to sell as well the steps and stages you should consider to improve and enhance prior to listing the company for sale.
You might not even realize some of these factors and levers at work already, but a consultation with a website broker can help you figure out if now is the right time or if you should wait. If you have the foresight and ability to prepare for your sale up to 12 months ahead of time, the return on your planning when you list and successfully sell the company can be tremendous. While it can take a longer period of time to get to that final offer, investing this time upfront has a potential to pay tremendous dividends and you will be thanking yourself for it after the fact.
This decision could even add hundreds of thousands or thousands of dollars to your final sale price. One of the first things that you should do when contemplating selling your business well in advance is to run as leanly as possible. 12 months prior to listing your company for sale is not the right time to make additional long term investments in your business.
One of the key reasons for this is that your sale price will likely be determined based on the preceding 12 months of earnings. This means that anywhere you can cut cost now will return to you as much as three times in the end transaction. You certainly don’t want to short change the company or do anything that could hurt the future potential prospects of the business when you pass it on to a buyer but be very careful about discretionary planning during this key time period.
If you can get an additional discount like paying for your subscriptions a year in advance and eliminate any bottom-line items that are not necessary to running the business and keeping it profitable, this is a good time to start doing those processes. Sit down with your accountant or in-house financial expert to review all of the expenses currently managed by the company and cut anything that is not critical. Being very intentional about your expenses can set you up for great success down the road. It’s also a great time to get your accounting in order. Your books might not be as tidy as could or should be and one expense that can be well worth making when preparing for a future sale is the right book keeper to ensure that all of your financial details are in proper order.
This makes it that much easier to write your sales prospectus or to advertise your business and also gives you peace of mind as you get closer to the sale as well. Schedule a consultation with knowledgeable business brokers when you are ready to think about selling.