Thinking of selling your business? The day that you sell your business can be the most rewarding of your career - providing you with the opportunity to take a well-earned break or transition to something refreshingly different.

For the selling process to be as smooth as possible and to ensure you get a great price for your business, it’s critical that you invest time and focus into the preparation phase.

Preparing your business for sale can dramatically increase the likelihood of selling and at the sale price you desire. When considering using a business brokerage firm choose one which has expertise in all aspects of the selling process to save you time later on. If you're getting ready to sell your business, it's crucial to have expert guidance every step of the way. Consider reaching out to Hedgestone Chicago, a team of experienced business brokers who can provide tailored advice and support to help you achieve a successful sale.

So… how can you prepare your business for sale?

Preparing your business for sale can dramatically increase the likelihood of selling your business and getting the right price for it. As we’ve mentioned above, if you need any assistance, there are companies who can help such as Lloyds Business Brokers, who have established an impressive international reputation for selling businesses over the past 38 years.

5 Steps Of Preparation

1. Document Your Business

Documenting your business helps to remove fear and uncertainty for the incoming owner. You should aim to document all aspects of your business, including:

Your business plan. This should outline your ‘recipe’ for success. As long as the new owner continues to follow this recipe, they can expect the business to continue doing well. A business plan ensures that everybody in the business knows what to do and where the business is headed.
Processes and procedures. These procedures should cover the ‘day to day’ functionality of how the business runs. The more processes that get documented, the easier it will be for the incoming owner to ensure things continue to run smoothly.
Contracts with suppliers, partners and customers. Verbal or handshake agreements are risky for new owners. Your business will be worth more if there are written agreements between all stakeholders.

2. Audit your marketing

No doubt your business has a website, some digital marketing and print media of some kind – even if it is a simple brochure or business card. This variety of media represents your business. It’s the image of your company. And it will make an impression - for good or bad! Sometimes it can be the first and only impression that your business will make with a new prospective client or potential strategic business partner.

For this reason, auditing your marketing assets is a must-do before listing your business for sale. Your marketing needs to be professional, on point and optimised for your target audience. To make a great first impression with buyers, don’t list your business for sale until you’ve completed this step.

3. Systematize Processes

This step is crucial for the following preparation step. When all of the functions within your business are systematized and documented, delegation to staff becomes much easier. Each staff member should have a clearly defined role, a clear chain of command, and systematized tasks that they are responsible for. A new owner can then see themselves fitting into this systematized business.

4. Make Yourself Redundant

A common fear from buyers is that you are the heart and soul of your business and that your business won’t function when you leave. This may be true if the business is built around you – having all of the knowledge and skills to run the business.

If this is the case, then you don’t actually have a business. You have a demanding job from which you can't resign. It is no wonder you want to sell it! The solution is to make yourself redundant by delegating to competent staff.

5. Clearly Document Your Profit

If you have not already done so, engage an accountant to adopt transparent and legal tax avoidance strategies that will enable you to maximise your profit and minimise your tax. A good accountant will help you to document your profit and clearly demonstrate your true profitability to a buyer – demonstrating the "add backs" to the owner.

By clearly documenting your profit and ‘add backs’, it will make your business more valuable in the eyes of a new owner and also safeguard you against potential legal repercussions after the sale.

Summary

Don’t rush to the phase of selling your business. The most important phase is the preparation leading up to the sale. The time and effort that you spend during the preparation phase will determine how quickly your business sells and for how much.

Imagine an iceberg, with 90% of the iceberg being hidden under the water and only 10% being visible above the water. Think of your business sale in these terms. 90% of the process of selling a business should be your preparation – hidden behind the scenes. Only 10% of the selling process is visible to the buyers once the preparation has been completed.

During the preparation phase, make your business a well oiled machine – functioning without too much ‘hands on’ involvement from yourself on a daily basis. And if you need assistance, engage specialists – accountants and business brokers.

Disclosure: This is a collaborative post.