When considering selling your business, the first question that pops up in your mind is “How much will I get?” As business brokers, we hear this question daily. The only honest answer is “I do not know (yet)”. Here is why.
Imperfect books Most likely, your accounting is far from perfect. Regardless of whether or not you think it is. We often represent investors and closely watch how they do due diligence. They always find some discrepancies.
Lack of procedures If you have a full set of job and workflow descriptions, we will be pleasantly surprised. Most likely, you do not. That creates an impression in investors’ minds that everything is linked to you personally, and the business may decline after your departure.
Insufficient sales management Most likely you do not use any formal procedure for tracking money and efforts invested into customer acquisition. In the meantime, it is very important to show investors that this process is formalized and automated to some degree. That will ease their worries about sales and overall company wellbeing after your leave.
Lack of HR documents If you are like 98% of our clients, your arrangements with employees are verbal. That may work, while you are around. Investors want to see everything in writing in order to be able to resolve any conflicts when you are long gone to your new life.
Chaotic marketing Marketing materials, especially online resources, are seldom in good shape. Even if you have a modern shiny website, there is plenty to fix, before turning the keys over to the investor.
Each of these reasons can make investors mentally discount your business value. As a result, you can lose 50% of your business’s potential market value.
Now you can see how inaccurate business valuation may be. Any broker who gives you his estimate of the price of your business without close examination is misleading you. That can lead you to underprice your company (and leave money on the table), or overprice it (and waste a lot of time trying to sell it without success).
We take a different approach. By coordinating the preparation of your business to be presented to investors, we learn many necessary details about the business. Ultimately, the Preparing Your Business to Sell process educates us to the level necessary to accurately answer the “how much” question.
Take action now!
Schedule a call with our specialist
and see how we can help you get what you deserve.