It takes a lot to sell a business successfully, and the pros at Utah Business Consultants are here to help. If you’re looking to sell your business, or even just to have a good exit planning strategy on the books for future planning purposes, we’re here to help.
Last month in this space, we went over part one of our two-part blog series on the steps you need to take to prepare your business for an exit planning execution. Here is part two.
Show Proprietary Elements
Potential buyers of a business love to invest in a proprietary element. This doesn’t mean you have to have a patent in play necessarily, though this can be helpful. Really, you just need at least one process or service that is unique – if possible, you should name it and own it as well. All exclusive elements of your business should be highlighted as primary selling points to potential buyers.
This may sound weird if you’ve never been through the process before, but as an owner, you have to remove yourself from the business and the process of exiting. If the business is only doing well because of you, you’ll decrease its value by selling it – the potential buyer needs to be able to ensure that they’ll retain value once you leave. In some situations, a buyer might look to lock you into a long-term earn out, which keeps you involved for a set period of time.
No business gets acquired without books that are properly maintained, going all the way back to the beginning of the business. Many small business owners struggle with bookkeeping – if this is the case, find a good outsourced company to keep good records. Your books need to have been audited regularly for the sale to proceed as expected.
Long-Term Management Team
A potential buyer may want to get an owner out of the business, but they’ll want to see a management team that has an eye to the future. If employees all have the option to leave after a business sale, this may be a big negative to the buyer. Put good employee contracts in place with your key management team – give them a bonus in the event of the business being sold rather than equity in the business.
For more on steps to take to prepare for a business sale, or to learn about any of our business exit planning services, speak to the pros at Utah Business Consultants today.