How Do You Make Your Company Sale-Ready from the Beginning
When starting a company your goal is to eventually grow and sell it for more money than you could ever imagine! That is the goal of many entrepreneurs, to make their companies sale-ready, and yet very few make the needed changes to achieve that goal. The most common mistake is failing to lay the groundwork for the company to survive without you. The key is to make your company sell ready from the very beginning. Regardless of when you sell the company, there are active steps that you can be taking to make sure your business can be sold at any time. The following tips are just a few ways that you can make sure that when you do place your company for sale, you will be able to achieve your dreams.
Buyers are looking for several key attributes in a company that is listed and ready for sale. They are interested in profitability, the culture, the management, how competitive your business is, and ultimately, how well the company can be scaled. Incurring large sums of debt is a bad policy to live by personally so why do so many businesses do it? If your company is in debt this will detract from the profitability and will likely scare off investors. Does your company for sale have a competitive edge? If your business is simply providing commodities that can be purchased elsewhere then you are not making an attractive business for perspective buyers.
Is growth a possibility with your business? Most prospective buyers are not looking to be painted into a corner. If the business has no potential for growth, then the buyers are not going to waste their time. Make sure you are building your business with growth in mind for it to be successfully sale-ready. Finally, do your employees understand the fine details of the business? If the team is poorly trained, or if you are simply poorly staffed, buyers are not going to find your business as attractive as they could.
There are also several ?technicalities? involved with the business model of trying to build it for future sale. Are your employees classified correctly? If they are not then you could be opening your buyer up to potential tax issues. If you are leasing a space for the business, has the landlord approved the transfer of the lease into another name? if not, and the business must move, is this going to be a workable solution? How are the long term contracts of the suppliers that you use? Many times these contracts are based on personality and any unsettling movements in the business landscape could cause major ripples. Has the business handled the proper tax liability?
If you are looking to the future, then you are probably already planning to have your company ready for sale at some point. Make sure you have examined these aspects of business life to assure that you are doing all you can now to prepare for the future. The decision to place your company for sale is not something to take lightly. Setting the groundwork for future sale is going to require a bit more research and legwork but the benefits will far outweigh anything you could imagine.
Are you considering selling your business? We can help you. Contact us anytime at?http://www.newgatecapitalpartners.com/contact/