DATE: October 08, 2018
There is much more to analyze than the bottom line of a company when preparing for a sale. Consider the 5 actions below to be best positioned for earning a maximum valuation when it is your time to make a transition.
1. Assemble a top-notch management team.
Buyers are interested in talented human resources. You can hire talent from the outside, or identify those with the greatest potential in your business today. Then, start to transfer your key knowledge, like critical business operations and crucial relationships, to your team.
2. Clean up all financial records.
Transparent financial and accounting records support a higher company valuation. Managing your balance sheet will keep more money in your hands. Also think about your legal entity. S-Corps and LLCs are typically the best for selling a business.
3. Create a growth plan.
Expected future performance influences your valuation. Create a plan by identifying areas of growth and the resources necessary to achieve the goals. Growth can include geographic expansion, new product development or client acquisition strategies.
4. Integrate information systems.
The ability to efficiently produce current and historical data on your customers, suppliers, employees and costs adds credibility to your business. Up-to-date systems also support the momentum necessary to close a transaction in a timely manner.
5. Build an attractive customer list.
Buyers may be wary when your top 2 or 3 customers make up a large percentage of total sales. Reducing your dependence on any one customer minimizes risk and adds value. Diversifying your revenue generation across many industries does the same.
To discuss your current range of value and likely buyers or investors, please contact us for a complimentary Market Value Assessment. Download this information as a PDF by clicking the image below.