Selling A Business
5 Ways You Can Tell if Your Florida Business is Ready to Sell
There are times when business owners get to the point that they are ready to hang it up, ready to call it a day, ready to try something new or sail off into the sunset with retirement. While it may be easy to know when you are personally ready to sell your business, the real question becomes: Is your business ready to sell?
Just because you have come to the conclusion that you are ready to move on does not necessarily mean that your business is in the best shape to switch hands. Here are five things you should analyze to know if your business is ready to sell – and for the top dollar.
1. Your Finances
You may love the idea, concept and/or mission of your company, but it’s fairly obvious that any buyer will want to get down to the nitty gritty and see the numbers behind the business. What this means is that your finances need to be in order, and your business should be performing well financially.
In addition, it’s extremely important that you know these numbers inside and out. Buyers will not only want to see how your business is doing today and how it did in the past, but how you’re projecting it to perform in the future if nothing changes. And you should be prepared to explain in depth every aspect of this.
2. Your Sustainability
Buyers look for businesses to purchase that can sustain success for a long period of time, well after the business becomes theirs. This means that not only must you have a product or service that is likely to withstand the test of time, but your business also could continue to do well without their investment.
In a way, this sustainability aspect ties in with the point above about your finances. Buyers will want to see that your business has the ability to sustain itself as it’s currently running without the need for them to pump a significant investment into it.
This isn’t to say the new owner won’t inject some cash into the business to try new things or take the business to the next level. Rather, it means that most buyers want to know a serious injection of investment isn’t vital just to sustain the business’ success as it is at the time of purchase, or just to keep it above water.
3. Your Systems
One of the most attractive things to buyers is a company that has great systems in place already. While most buyers want to put their own stamp on the business, they most likely don’t want to have to clean up a complete mess.
To this end, it’s very important that your company has well laid-out and easy-to-understand systems that are used throughout the company, and that the knowledge of how to run the company isn’t in only your head or the heads of a few key employees. In other words, the process of running your business – and the knowledge of how to do so – needs to be decentralized.
While the buyer will most likely tweak the systems after they purchase your business, seeing these systems already in place will signify to them that the transition won’t be a nightmare.
4. Your Customer Make-Up
The key to any business’ long-term success is its customer make-up. The more diverse the customer base is, the less likely it is to experience a severe drop-off (or peaks and valleys) in revenue based on one particular customer or segment of customers.
Buyers are attracted to a diverse client base because they want to know the business they are purchasing will be long-lasting and have the ability to succeed even if they lose a big customer. The more diverse your customer base, then, the more attractive your business will be to buyers.
5. Your Team
When you sell your business, most, if not all, of your top people will stay on hand and work for the new owner. These are the people the new owner will rely on most to help guide them through the transition period and beyond. It’s important, therefore, to have a good, solid team in place, made up of reliable people who are hard-working, knowledgeable and have the ability to lead the company even after you’re gone.
A buyer will lean heavily on these people, and they may want to meet them before making the final decision on purchasing your company. It’ll be important that you get buy-in from these key people as you’re finalizing details to sell your business as well.
When the time is right, you may want to bring them into the loop, break the news to them, educate them about the new owner and the transition and why it will be great for them. This could go a long way in not only appeasing the potential new owner, but also calming any fears these employees, who you care for dearly, may have.
If your business is aligned with these five key indicators, then you know your business will be ready to sell as much as you are.
Sunbelt Business Brokers of West Palm Beach can help you prepare to sell your business in South Florida, guiding you from listing to closing. If you’re considering selling your business, get in touch with us today for a confidential, no obligation conversation.
