You’ll need to do more than hang up a “For Sale” sign on your business to attract serious buyers. Business owners need to determine the true worth of their company. So it really helps your sale to work on improving operations to maximize its profits and selling price. Here are 5 ways to increase the value of your business.
1) Raise your Gross Margin
Duh! The value of your business is determined by its profitability multiplied by an industry specific multiple. Since you can’t really change the industry your business is in, you must focus on maximizing profitability. A potential buyer wants to know “How much money can I expect to make per month if I buy this business?” If your business has low or inconsistent profits, you need to determine why it’s happening and fix it before putting your company up for sale.
2) Get your business Organized!
You’ll need to review your financial and personal goals for selling your business and get organized! This requires assistance from your accountant, tax consultant and a qualified business broker. Gather all your financial, tax and sales statements and discuss the value of your business and affiliated real estate, tax status, and your personal financial situation. Make sure you’ve secured or renewed all necessary permits, trademarks, patents, licenses and zoning approvals necessary for your business to run legally. Once you’ve gone over these items with your team, you can work on a plan to sell your business. A detailed sales plan boosts your business value because it leaves nothing to chance. You’ve answered all questions about your company’s status and can work to improve them before putting your business on the market.
3) Spruce Up Your Storefront and Physical Inventory
Clean up your store or office before opening it up to buyers, and prior to shooting video for an online sales listing. By new furniture, paint walls and ceilings and change outdated light fixtures. If your facilities look shabby, it may turn off potential buyers, even if your business looks great on paper.
4) Boost Social Media Visibility
Potential buyers will scope out your business through social media. Consistent posts across several social media channels drive brand awareness, giving your business a worldwide audience. Email newsletters, a professional website with a blog, and a stable of “influencers” following your Twitter, Instagram and Facebook posts add to your company’s value and appeal. Buyers know they don’t have to spend time creating a marketing plan. They’ll simply need to continue it and add their own touches.
5) Create Ongoing Revenue Streams
Look into ways to create ongoing, passive revenue streams. These consistent revenue sources include membership fees to exclusive websites, events or clubs, digital products (e-books and reports), affiliate sales and service plans. Revenue streams create sales for the new owner(s) from the moment you sign your business over to them.
6) Have a Distinctive Product or Service
Do everything you can to differentiate your company from others in your field. Go the extra mile (or two) in research, production, marketing, customer service and sales. If your business has the same product quality and image as others in your industry, it will be harder to attract a good buyer willing to pay your desired price. Buyers want to be sure a business has a good reputation and a money-making brand before they pony up their hard-earned cash.
7) Determine a Reasonable Selling Price for Your Business
All business owners want to sell their business for the highest price possible as quickly as possible, but it doesn’t always work out that way. Don’t pick a number out of the air and hope a buyer will jump at it. Instead, prepare your Seller’s Discretionary Earnings (SDE) statement after reviewing your cash flow, expenses and tangible assets. Do an honest appraisal of your business attributes with the help of an impartial business broker, and check out prices for similar businesses in your area and industry. Once you’ve gathered all this information, your selling price should be between one and four times the annual SDE. There may be exceptions to this rule, and a professional business adviser can determine if this is the case with your company.
8) Retain High-Quality Employees
Sure, you’ll be out of the picture after you sell your business, but the employees and managers you hired will remain. Motivate key management personnel and ensure they’ll have reasons to work with you toward a successful sale and stay on with the new owner. Build relationships with employees, and offer career training, performance bonuses, equity ownership and other incentives to ensure a long-term workforce.
Don’t try to sell your business on your own. For expert advice on preparing your business for a quick sale, contact a business broker. https://sellyourbusinessfast.info/ Learn more about ways to attract buyers who will pay top dollar for your business. Call 1-800-BIZ-BROKER today or visit our website www.1800bizbroker.com. We’ll help you find a friendly, professional business broker in your area.