As we mentioned in the last blog post, Baby Boomers are retiring and they're putting their businesses up for sale, and the trend will be there for the next 5 years--which also means that buyers are looking for opportunities in this hot market.
In addition, there are many other reasons why a business owner may sell. Please see our prior post Part 1, which will outline the first 5 steps. Below are the last steps you should consider as you prepare to move on to retirement or the next great thing.
6. Simplify Your Business Model.
Be able to explain your “secret sauce” – what are the differentiating factors of your business, and what is the key to your success? Developing strong policies and procedures will allow a buyer to be able to pick up how you conduct business easily.
· Rarely do buyers have all the skills and interests you had. They will be scared away if they feel that you are critical for the success of the business. How can you create a template for their success when they take over the business?
· Focus on the parts of the business are key to your core operations and avoid branching out “just because.”
7. Be Sure You Have a Social Media and Web Presence
Anyone looking to purchase an existing business will expect you to have a strong online presence, and social media that align with the potential purchasers of your product or services. A modern website with an easily defined domain name are a minimum requirement for ANY business in the current market.
Your website, at a minimum should have the following:
· Contact information
· Business information
· Online ordering capabilities (if appropriate)
· Google My Business page with a Google Map link – so people can find you
Other social media sites are important as well. Depending on your prospective buyers, you should have the following social media accounts: Twitter, LinkedIn, Instagram, Facebook.
Be sure that you monitor Yelp and other review sites (including Google) for reviews, respond to any negative reviews (and deal with the underlying complaint), and thank positive reviews on a timely basis. Since so much is easily available online, potential purchasers will look at your reviews to ensure that your clients are satisfied with your services.
8. Engage Trusted Advisors.
All business owners should have a CPA/accountant, insurance agent and attorney who clearly understand the business and can advise you on how to best operate. In addition, if you are planning to sell, a personal financial planner and an effective business broker will help ensure that you maximize the value of your business when you sell. In any case, make sure that all your advisors have your best interests in mind, and make sure your advisors are in their lanes.
Finally, you may have some key employees who can provide the needed assurance of continuity when you sell the business.
9. Maintain Confidentiality
When you are thinking of selling, do NOT alert your customers, suppliers/vendors, employees, or even your neighbors or personal friends. Only involve those who are on a NEED TO KNOW basis. In addition, don’t tell the landlord about your plans to sell until the transaction is imminent and the buyer needs to negotiate with them.
10. Run the Business as If You Aren’t Selling.
The worst thing a business owner can do to the value of their business is to focus more on selling than on running the business. In our experience, we have seen the value of businesses fall dramatically when the owner who wanted to sell took their “eye off the ball.” Ensure that key repairs, maintenance, inventory purchases, hiring new employees and training them, continuing employee raises, maintaining current licenses, and reporting are taking place as usual.
A business owner should always consider that the sale could take longer than anticipated, and a potential sale could fall through. Be ready for those contingencies. In any case, please give us a call at (801) 753-5655 to see how Transworld can help!