Selling Your Business? Here’s How to Make It More Sellable
Selling the business might be the eventual goal of some business owners—but it’s not as easy as many people think. It isn’t like selling a house where you can put it on the market and have a buyer come along in a few weeks.
There are simply too many factors that determine how sellable a business is. The rule of thumb, however, is that the better shape your business is in, then the more likely you’ll get to sell it for a good price.
To help streamline that process, here are some things you can consider when making your business more sellable:
Business structure and relationships
The business structure should be easy enough to understand, including its reporting relationships. Ask yourself if the roles are defined enough or if there’s a bit of restructuring that you have to do.
The key reporting relationships should also be identified here, especially if there are members of your staff and clients that are essential to running your business.
Potential for growth
The likelihood of selling your business will also depend on how much growth that buyers predict it will have once it’s sold. Businesses that can grow and scale are easier to sell, as it has a lot to offer to potential buyers.
Make sure that your business still has a future for growth and expansion after it’s been taken over.
To put it simply, those who are buying businesses don’t want to deal with old stock. These have very little value to them once they’ve purchased the business; after all, customers will not want a stock that’s older than 12 months as this is considered obsolete.
When selling your business, get rid of the old stock and replace it with new ones!
Expensing private items
Although business owners might consider expensing private items to lower profit and tax, it can hurt their business value. By moving to expense private items, you are making yourself susceptible to tax audits that can yield unfavourable results detrimental to the sellable value of the business. An accounting firm can help you sort this out.
If business buyers see that you have one or two clients that make up an outstanding chunk of your revenue, they can be sceptical about purchasing your business. When you sell your businesses, some clients can be picky and move elsewhere, especially if they much preferred conducting business with you.
However, having more than one significant client can attract buyers of your business, especially if they are transferable when your business is sold. It means that these will be consistent sources of revenue once the business has moved.
Accounting and internal systems
Your business systems, including inventory control and accounting systems, should be up to date, efficient, and can be handed over to the new business owners. This is especially important for your accounting systems, which has all your financial records.
Hiring a small business accountant is crucial when it comes to updating your accounting and attracting buyers.
By dedicating some time and effort into whipping every aspect of your business into the best shape it can be in, you’re increasing your chances of attracting a buyer who will buy your business at the price you set—or perhaps even higher! Just make sure that all your paperwork is in order and that you’re honest about the business’ strengths and its points for improvement. A buyer might just come along and see it for all its worth!
Small businesses need the best accountants in Gold Coast to help get their bookkeeping in tip-top shape for a business sale. Here at New Wave Accounting, we provide end-to-end accounting and bookkeeping services that help grow and scale businesses. To understand how we tailor-fit solutions for our clients, visit our website today.