(Sacramento) – Before you put your business on the market to sell, be sure you are prepared so you can get the best price possible. The California Association of Business Brokers (CABB – a non-profit trade organization) wants business sellers to know that there are several key things they can do to showcase their business and make it attractive to prospective buyers.
“Buyers want to know that there is growth potential in the business,” stated Ron Hottes, president of CABB and of several Business Team business brokerages. According to Hottes, there are is a checklist of things a seller should do to get their business ready:
Keep your records updated. Make sure you are staying on top of financial records, keeping them organized and showing a profit. “You also want to have at least three years of financial records ready to show serious buyers when they ask,” Hottes stated. In addition to finances, be sure to have current copies of insurance policies, building lease and any licenses. Having this information prepared and organized demonstrates that you have an organized business.
Retain employees. In most cases, it is not recommended to tell employees about the sale until a deal is closed for fear of decreasing morale or employees leaving the company altogether. But even when kept confidential, there could be rumors about a possible sale so a business owner needs to be ready to respond when confronted. “They should also hold a discussion about employee retention with the new owner as soon as possible,” Hottes stated.
Build value. Most owners know well in advance when they plan to sell. The time between now and then should be spent building as much value in the business as possible. Hottes suggests sellers review their business operations to find ways to run more efficiently. “Take a comprehensive look at your operations and determine where you can cut costs and still provide the same level of service,” Hottes stated. “Focusing on a niche or specialty area that reaches a new market can help bring in additional income as well.”
Work with a certified business broker. A business broker has the knowledge and experience to make sure all areas of your business is looking its best and profitable. A broker can also provide a seller with an objective point of view as to the value of the business, which can be difficult to an invested business owner. Having the expertise of a broker can make the difference between selling and selling for the best price.
For more information, call Kristen Paquet at (920) 965-7750 or email kpaquet@lfpublicrelations.com.
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