Make sure there are other factors for putting your company up-for-sale, whether it’s your desire to acquire equity for a new business venture or simply to retire. It’s never too late to begin the process where to start when selling a company.
The idea to plan an exit strategy is important to gain maximum market value. You need to acquire some information on prospective buyers, in order to gauge their true interest in making a deal.
Here’s where to start when selling a company:
Get Your Financial Books In Order
Too often, potential deals have stalled or fallen apart because the owner kept sloppy financial records. The breakdown was caused by a lack of evidence of profit and actual or potential growth that was embarrassing missing from the financial statement.
Once you place your company on the market, detach yourself and treat it as a commodity. To gain a buyer’s confidence, have available an audited financial report from a reputable accounting firm that was commissioned before putting the company on the market. It can be a costly process, but appearances can make a company more attractive to the buyer.
Protect Your Intellectual Property
Show prospective buyers the amount of patents the company holds, as this should broaden the appeal and market value. Spend the money and time to trademark the company’s name and obtain copyright protection on all products under development. Sometimes, it might be too late to take legal action when finding out someone has infringed on your intellectual property. Typically, you will get back every dollar spent with a very generous offer.
Make Sure The Company Isn’t Dependent on You
Sorry, potential new owners don’t have an interest in your past accomplishments. Depersonalise yourself and let the buyer imagine themselves in charge.
A company that solely depends on one individual can become a difficult product to sell on the open market. The general rule is a company that relies less on the owner receives a higher price from prospective buyers.
Keep your involvement minimal, but still observing and managing the day-to-day operations. Refrain from participating in major projects, as this could create a mess and take your time away from making a deal. However, do investigate smaller projects that could gain big results in the future.
Catch Up on Maintenance
Get around to the maintenance and repairs that you have put off for the longest period of time. Drive up to office building and observe what a potential buyer will see. Many owners lack the imagination needed to picture how much attractive the building looks with some maintenance work.
Order your staff to trim the hedges, prune the trees, mow the lawn and plant colorful flowers. Get all of the debris off the property, as the outside should look as perfect as possible. Inside, you should repair the cracks, replace all of the burnout light bulbs and pin the wires behind the computers. Have the carpets replaced or at least professionally cleaned.
All of this are easy fixes and shows to potential buyers that you pay attention to detail and care about every aspect of the company. Your job is to make them feel they could takeover tomorrow without the need to make one single upgrade.
KBS Corporate provides great assistance on where to start when selling a company.