10 Keys & 1 Big Bonus to Selling Your Business For More

Thu May 25, 2023

Selling a business for a higher price involves careful planning, preparation, and execution. Here are some steps to selling a business you can take to maximize the value of your business before going to market:

Financial Performance

Ensure that your business is in good financial health and can demonstrate a track record of profitability. You will need at least 3 years with a profitable upward trajectory. As well you should have your financial advisor business coach help clean up your financial statements, resolve any outstanding liabilities, and improve cash flow. Each piece is another step in increasing the market value of a company. A financial advisor business coach offers personalized guidance to navigate the complexities of finance. They provide strategies for business planning, cash flow optimization, investment management, and risk mitigation. These mentors empower individuals with skills, financial literacy, and a growth mindset, fostering success and sustainability in business and personal endeavors.

Historical and Projections

As part of your M&A due diligence checklist you will likely be asked to prepare a detailed record of your business's financial performance, including historical data and future projections. Buyers will be interested in the potential for growth and profitability. It’s never too early to get started on this. Caution when developing projections. Avoid the hockey stick projection no matter how realistic you may think it is. Buyers will immediately question the projections and may shy away from any further discussions. They want a realistic achievable view of the future.

Strengthen Key Areas

Identify and enhance the key aspects of your business that potential buyers value the most. This could include improving customer and vendor relationships, expanding your market share, diversifying your product or service offering, or increasing operational efficiency. Utilize business value consulting, family business coaching and consulting or a trusted business advisor. Work with a financial advisor business coach and sale advisor to guide you. Spend your time where you will get the biggest bang for your buck. The areas buyers are keenly interested in, operations, finance and sales.

Document Processes and Systems

Create well-documented processes and systems within your business. Clear documentation increases the value of your business by making it easier for a new owner to take over and continue operations smoothly. If you haven’t already documented your processes you’d better get started right away. It will be on the M&A Due Diligence Checklist. More than likely this will be one of the early questions. Buying a good company is important. Running it from the get go is equally important. The M&A Due Diligence Checklist is a crucial tool for conducting thorough assessments during mergers and acquisitions. It ensures comprehensive evaluation of financial records, legal documentation, intellectual property, contracts, operational processes, and potential risks. This checklist facilitates informed decision-making and helps identify opportunities, synergies, and potential challenges, ultimately enhancing the success of the M&A transaction.

Intellectual Property

Protect and leverage any intellectual property, patents, trademarks, or copyrights that your business owns. Intellectual property assets can significantly increase the value of your business. Meet with your legal counsel and confirm all documents are up to date. Bring a professional in early for business value consulting to put a price on your IP.

Customer Base

Develop a loyal and diversified customer base to demonstrate the stability and growth potential of your business. Reduce customer concentration risks by expanding your client portfolio. This is particularly important if you are thinking about how to sell your business to a competitor. Make sure customer lists and sales information are easily available. Or conversely, to quickly increase your customer base, consider growth through acquisition. Buy your competitor and integrate their sales with yours.

Professional Advisors

Engage professional advisors, such as a financial advisor business coach, accountants, lawyers, and business brokers, with experience in business sales. They can guide you through the process, provide valuable selling insights, and help negotiate the best deal. Hire an M&A consulting firm or sale advisor, sometimes referred to as a trusted business advisor. Utilize a professional for business value consulting to determine the market value of a company.

Market Research

Understand the market conditions and industry trends to position your business attractively. Highlight the unique selling points that differentiate your business from competitors. Identify competitors who may also be selling or buying and your suppliers who may be looking to make strategic acquisitions.

Marketing Strategy

Create a comprehensive marketing strategy to reach potential buyers. This may include advertising in relevant publications, leveraging online platforms, engaging in industry events, or working with an M&A consulting firm or business broker to find suitable buyers.

Negotiation Skills

Strengthen your negotiation skills and engage a skilled negotiator like an M&A consulting firm to secure the best deal. Consider not only the purchase price but also other factors like payment terms, non-compete agreements, and the transition period after the sale. 

1 Big Bonus, Revisit the Back Burner

As an Owner, we have all accumulated new or crazy ideas that have not been implemented. Some came from customer requests, an offhand conversation with an employee or supplier, middle of the night brainstorms and strategic planning sessions you only partially executed. If you want to impact the answer to the question, how much do I sell my business for? Start here.

We all have ideas to boost the business, just never could find the time to do anything about them. Tried once, had some success but you weren't comfortable with the amount of work required to fully exploit the idea. So you just left it on the back burner to simmer or worse, get cold.

I guarantee if there was an idea generated and not acted upon, it wouldn't take long to quickly determine if it could have a life. You want to know if there is an ember of possibility or not. Blow on the ember and massive flames can grow out of it. If the idea proves to not be viable then use it as a starting point. One idea typically begets another and another etc.

Are you sitting on other unexploited sales, money left on the table? An opportunity to take your tired business in a different direction.  You could be sitting on a pot of gold. And if you aren't prepared to take the idea to the next step, then pretty it up and use it to sweeten the deal for a prospective Buyer.

Once you dust them off, be careful as you may now want to move forward on some of the ideas and put the sale of your company or the launch of something else on the back burner. My suggestion is to run on parallel paths. Continue preparing for the sale as you never know when the right Buyer will come along or you no longer have the choice about selling. 

Prepare the list, do the best you can and consider handing over the list to the new Buyer. No one will pay you for the opportunity they have to execute on. However, sweetening the deal is always nice. Or tie the new idea into an opportunity you could run with at a later time. Post transition.

This is a team sport so get your staff, vendors and customers involved. Remember confidentiality is key. So be careful and selective who you let in on the process and don't tell anyone everything. Until the time is right.

Remember that selling a business can be a complex and time-consuming process. It's essential to be patient, realistic, and flexible throughout the negotiation and transaction phases. Seek professional advice tailored to your specific situation to increase your chances of selling your business for a higher price. If you find yourself pondering questions like, "How long does it take to sell a business?" or "Should I sell my business?" it's essential to understand the steps involved in the process. From evaluating the worth of your company to determining the ideal selling price, the assistance of a business value consulting professional can be invaluable. Their expertise can guide you through the intricate steps of selling a business, ensuring you make informed decisions that align with your goals. For specialized advice and tips on selling a business, particularly for family businesses, this blog is the ideal resource. Gain insights from an expert in family business coaching and consulting to navigate the path to a successful business sale.

Are you asking yourself how long does it take to sell a business? Or should I sell my business? What are the steps to selling a business and how much do I sell my business for? Do I need a business value consulting professional to calculate value of a company?  If you’re looking for tips for selling a business from someone who specializes in family business coaching and consulting, you’ve come to the right blog.

As a trusted business advisor and sale advisor I appreciate the opportunity to share my years of experience working with you. In fact you may want to consider our online program Sell Your Business 4 More. Click on the Eric Gilboord Coach cap above.

Eric Gilboord
A Toronto-based seller of businesses. Loves talking to first time business Sellers about transitioning themselves and their company

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