Selling A Business
How to Start a Business You Want to Sell in South Florida
Some people start businesses with the idea that it will stand the test of time and support their family for years to come. For some, running a business is a lifelong endeavor that will eventually either result in the business getting passed down to future generations or sold to help support retirement and/or these future generations.
But not all businesses have to be started with this long-term goal in mind. In fact, there are plenty of entrepreneurs who start businesses with the singular goal of selling for a profit when the time is right. These people will often view their business as simply an investment, with the return gained being used to sustain themselves and their family, as well as serving as capital for future investments.
Any successful business starts with a good idea — no matter what the end goal of the owner is. But once this idea has been formulated and the investment has been made, how the business is run should vary depending on whether you intend to run your business for years to come or sell it when the opportunity arises.
Here are some ways you may want to structure your business if your goal from the beginning is to sell.
Create Processes and Put Them in Place
One of the most attractive things to buyers are businesses that have solid practices, processes and procedures in place. This includes how the products and/or services are created, distributed, marketed and sold; how customer service is handled; and how other departments such as IT and HR are run.
If your goal in starting a business is to sell it, then it’s advisable that you set formal processes and standard operating procedures in place from the get-go for as many aspects of the business as possible. Of course, these processes can change and evolve over time as your business changes, evolves and grows. Making sure you have them written and explained well will be key for potential buyers who desire a seamless transition from one ownership to the next.
Track Your Results
Any business should have a system in place for tracking and analyzing data. After all, it’s extremely simple to do so nowadays with both online and offline resources. If your goal is to sell your business, though, this should be top of mind from the outset.
Set up a website and social media accounts, and then put digital marketing plans in place from the beginning. Even if you don’t launch these marketing campaigns until your business is ready to fill expected orders, having everything in place will help streamline the process.
Then, make sure all your digital channels are connected to tracking services such as Google Analytics. This makes it easy for you to monitor your company’s performance, and also makes it easy for prospective buyers to see how well you’re doing. Having this run through a third party will also help legitimize your performance, as it’s hard to argue with the results of a company such as Google.
Create Clean Books
One of the most daunting and time-consuming tasks a business owner must undergo when they want to sell their business is to organize and prepare their books to be analyzed by buyers. A lot of business owners start with a haphazard or archaic booking system at the outset, and only transition to something more robust when they grow.
If you’re preparing to sell your business from Day 1, though, you can save yourself a lot of trouble by setting up — and keeping — good, clean books from the start. This may entail some extra legwork on your end, as well as a minimal investment in official accounting software and/or employees, but it’ll pay huge dividends in the end.
Not having to spend the time and money to organize your books when you go to sell will be huge. Plus, it’ll help you run your business more efficiently and effectively as you’re trying to grow its value.
Build Value — and Market When the Time is Right
Ultimately, the goal of any business is to build value over time and become profitable. That goes without saying. Those two elements don’t always work hand-in-hand, though, and how and when to do each depends on your business goals.
For example, if you’re a single-owner business and desire to be that way for the life of your business, then your goal will most likely to be to turn a profit as quickly as possible for as long as possible. If, on the other hand, your goal is to sell your business, then the most important thing is to build as much value as possible as quickly as possible. This may mean foregoing profits early on in favor of growth.
Because the idea of selling a business is to get as much money as you can from the sale, then being profitable isn’t as important in the early years of the business. Instead, a lot of entrepreneurs who aim to sell their will pump investments into the company early on, and then focus on profits later, in the years directly preceding the sale. This allows them to build as much value in this business as possible, and then show prospective buyers that not only is the business growing, but it’s turning a profit.
If you’re planning to sell your business from the day you start your business, then structuring the company and its practices around these four simple steps will make it easier for you to sell — and will put you in the best position possible to earn the largest return on your investment.
Sunbelt Business Brokers of West Palm Beach can help you prepare to sell your creative 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.
